Corporate report

SME Banking Undertakings: The 2014 Agreement

Published 20 July 2023

Agreement with respect to the limitation of bundling

That THE BANK ^{[footnote 1]} will, with respect to clauses 17 to 19 of the behavioural undertakings given by the banks to the Secretary of State for Trade and Industry and Chancellor of the Exchequer on 31 October 2002 (‘the Bundling Undertakings’):

• on an annual basis, conduct a review of [THE BANK’S] compliance with the Bundling Undertakings, specifically including the following issues:

  • the policies, practices and procedures (including those related to training) which THE BANK has in place to secure compliance with the Bundling Undertakings

  • the awareness of THE BANK’S staff who are responsible for the marketing and sale of business loans and business deposit accounts (‘the Relevant Staff’) with the obligations created by the Bundling Undertakings.^{[footnote 2]}

  • other evidence suggesting the presence or absence of actual or suspected non-compliance with the Bundling Undertakings (including customer complaint data or data available from internal escalation processes for internal concerns)

  • such a review must be conducted, outside the area of the bank which is directly responsible for the provision of banking services to SMEs, by the internal audit function of THE BANK, in accordance with the Code of Professional Conduct^{[footnote 3]} of the Chartered Institute of Internal Auditors ^{[footnote 4]}

• provide a copy of such a review to the OFT/CMA with an annual statement of THE BANK’S compliance with the Bundling Undertakings which addresses the issued referred to in 1a. The first such statement will be provided by [THE BANK] to the OFT within 4 months of its announcement by the OFT

That THE BANK, on an annual basis, provides to each of its Relevant Staff, a specific and direct written reminder (which covers no issues, other than the subject matter of the Bundling Undertakings) of:

• THE BANK’S obligations under the Bundling Undertakings

• that THE BANK considers that any breach of those obligations is a serious matter, and that appropriate action will be taken in the event that a member of its staff fails to comply with them. The first such reminder will be provided by [THE BANK] to the Relevant Staff within 1 month of its agreement of this proposal and its announcement by the OFT. A copy of such a reminder will be provided to the OFT/CMA within 10 working days following its provision to the Relevant Staff

Terms used in this document are consistent with the definitions included in the Undertakings.

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1. Signatories to the Undertakings are: AIB Group (UK) plc (known as AIB NI in this report, and previously known as First Trust); Bank of Ireland; Barclays Bank plc and Barclays Bank UK plc (together, Barclays); Clydesdale Bank plc’s SME Business and Branches in Scotland branded as Virgin Bank (Clydesdale); HSBC UK Bank plc (HSBC UK). HSBC Bank plc was released from the 2014 Agreement during 2023; Lloyds Banking Group plc, formed from merger of HBOS plc and Lloyds TSB Bank plc (LBG); Northern Bank Limited (Danske Bank); NatWest Group plc (NatWest Group) (formerly the Royal Bank of Scotland Group plc (RBS)) which includes Ulster Bank Limited (Ulster Bank) in Northern Ireland. ↩

2. In undertaking such a review, an appropriate sample of staff should be assessed. Such a sample should be representative of staff at the various brands within THE BANK’S Group (where applicable), geographical locations and the range of sales/marketing channels available (e.g. in branch, online, by telephone). ↩

3. Code of Professional Conduct, Member benefits, Members, IIA ↩

4. In the event that the internal audit function of THE BANK is unable to conduct that review, the review must be conducted by an external auditor, independent from THE BANK. ↩