The Competition and Markets Authority (CMA) says it will work with representatives from small businesses before publishing findings into competition in the banking sector this summer.

The CMA is picking up work started by the Office of Fair Trading (OFT) which looked at competition in SME banking .

It will consider work undertaken by other groups, including the Treasury Select Committee inquiry into SME lending, as well as evidence from non-government lobbies.

CMA said its investigation, the results of which will be published in a few months, will cover:

- the banking providers operating in the sector

- how dynamics of competition operate, and

- the way that personal and SME customers consume banking services, including levels of customer engagement with banking providers

The report will help policymakers decide whether a formal market investigation is required.

In response, the British Bankers’ Association, said: “We want businesses to have as many options as possible when seeking to get finance which is why individual banks and the BBA have set up programmes to refer customers to other institutions who might be able to help if they have been declined for a loan.”