Commenting on the Project Merlin figures, published by the Bank of England, David Frost said “Lending targets should not be the sole measure of how well small business lending is performing. Relationships between banks and business have suffered over the course of the downturn, with the failings of over-centralised processes and poor customer management being laid bare. 

“Banks are trying to change the way in which they interact with businesses, with more transparent and accountable ways of working. But the benefits will not be seen overnight, and there are other issues that need to be addressed as a matter of priority. For example, the furore surrounding lenders has meant that firms have lacked confidence in seeking finance for fear of being turned away.

“The Independent Commission on Banking must play its part by proposing a regulatory structure that will create a more competitive market in the provision of business finance. Firms must have the ability to switch accounts more easily, and have access to better information on the products that they are using.”