* 798 million pounds paid out so far
* Banks had set aside 3.75 billion pounds
By Matt Scuffham
LONDON, May 8 Britain's biggest banks have so
far paid out only a fifth of the funds they set aside to
compensate small businesses mis-sold interest-rate hedging
products, data from Britain's financial regulator showed on
The Financial Conduct Authority (FCA) said that, by the end
of April, compensation amounting to 798 million pounds ($1.4
billion) had been paid to 5,732 customers.
Britain's biggest four banks - Barclays, HSBC
, Lloyds Banking Group and Royal Bank of
Scotland - have set aside a total of 3.75 billion pounds
to deal with the issue.
The FCA said banks were on track to meet a deadline for
completing the review of nearly 30,000 cases for potential
mis-selling within 12 months of starting the review. The
regulator ordered banks to start compensating firms last May
after finding serious failings in the way the hedging products -
known as swaps - were sold.
The products were sold on the basis they would help protect
smaller companies against the risk of rising interest rates, but
when rates fell, they had to pay large bills, typically running
to tens of thousands of pounds.
Companies faced penalties to get out of the deals, which
many said they had not been told about when they bought them.
The FCA urged 1,300 firms who have yet to opt into the
review to do so. Some small businesses have chosen to take legal
action against banks instead, pursuing claims for consequential
losses which could lead to bigger payouts.
($1 = 0.5894 British Pounds)
(Editing by Chris Vellacott and David Holmes)