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OFT announces market study on SME banking

The OFT yesterday announced a market study on competition in banking for small and medium-sized businesses (SMEs) and is seeking views on its scope.

The study is part of the OFT's continuing planned programme of work in retail banking, of which the first stage was a review of personal current accounts, concluded this January. The OFT is now bringing forward its review of banking for SMEs. It also coincides with the final report of the Parliamentary Commission on Banking Standards and continuing public interest in this area.

The SME banking study will cover England, Northern Ireland, Scotland and Wales. The OFT has launched the first step of this work yesterday and is seeking views on its proposed scope, in particular on:

  • competition in the supply of banking services to SMEs - whether SMEs have access to services that meet their needs and represent good value
  • competition in the supply of lending or other finance to SMEs - such as whether any lack of competition between banks is holding back SME lending or other finance to SMEs
  • whether there are types of SME (for example, start-ups or small financial firms) that face particular difficulties, and if so why.

Clive Maxwell, OFT Chief Executive, said:

'A competitive banking system and access to finance is vital to businesses and to economic growth.

'Our review of SME banking is part of an ongoing planned programme of work in this area to allow the Competition and Markets Authority to decide whether or not to make a market investigation reference by 2015. We welcome today's Parliamentary Commission on Banking Standards report which stresses the importance of competition in this sector.'

The OFT will work closely with the Financial Conduct Authority, the Bank of England and the Prudential Regulation Authority on this review, and will contact the industry and SME representatives. It would also like to hear from SME customers and anyone who would like to submit views can contact the OFT at


  1. The OFT announced its planned programme of work into retail banking, including its proposal to look at SME banking, in July 2012.
  2. The Parliamentary Commission on Banking Standards today issued its final report. One of its recommendations is that 'the Competition and Markets Authority immediately commence a market study of the retail and SME banking sector, with a full public consultation on the extent of competition and its impact on consumers. We make this recommendation to ensure that the market study is completed on a timetable consistent with making a market investigation reference, should it so decide, before the end of 2015.'
  3. The Competition Commission carried out a review of SME banking in 2002.

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