better banking

Case - 49714

2016 - 2017

Lending

Non-property lending

Mr K applied for a loan to buy the company he worked for. The bank approved the loan and Mr K bought the company but it didn’t perform as expected. After 18 months, Mr K decided to sell it and complained that the bank shouldn’t have granted him the loan. He thought the staff member who assisted him with his application had a conflict of interest because she was also the vendor’s personal banker. The vendor hadn’t disclosed significant debts which Mr K inherited when he bought the company.  Mr K thought the banker knew about these debts and should have told him.

Our investigation of Mr K’s complaint was limited to information the bank held about his loan application. We couldn’t ask for information about its relationship with the vendor because this is confidential and couldn’t be released without the vendor’s permission.

We reviewed Mr K’s loan application and couldn’t identify any suggestion the bank was aware of adverse information about the company. We also noted that the bank’s credit team had approved the loan, not the banker Mr K was concerned about. We were satisfied the bank had correctly followed its process for assessing Mr K’s application. We explained this to Mr K and while he was disappointed we couldn’t investigate the vendor’s banking relationship, he understood the limits on our powers and accepted we were unable to assist him further.