A report released Tuesday by the Canadian Federation of Independent Business says some banks are doing small businesses a major disservice.

Based on survey results from over 12,000 business owners across the country, the Banking on Better Service report evaluates banks and other lending institutions based on the views of their actual clients.

In its assessment of Canadian banks’ small business-related financing, fees and service, CFIB’s report contains three separate ratings based on business size: micro (0 to 4 employees); small (5 to 49 employees); and mid size (50 to 499 employees).

The report singles out CIBC for poor performance. While CIBC rated first in the mid size category, they rated last by significant margins in both the micro and small categories.

On the opposite end of the scale, credit unions not only dominated the micro business category, but they also led the way in the small category.

HSBC Bank Canada had a strong showing across the board.

“When you consider that micro size businesses alone account for over three-quarters of the businesses in Canada, you would think that it would be in a bank’s best interest to serve them well, especially considering their role in job creation and economic growth,” said CFIB president, Catherine Swift.

In addition to the ratings, CFIB’s report tracks each bank’s change in the small business market share over the past 20 years. While Royal Bank of Canada and National Bank of Canada have lost a quarter of their small business market share, CIBC has experienced a contraction of almost half. Bank of Nova Scotia and credit unions, on the other hand, have almost doubled their market share.

“These data demonstrate why certain banks are fairing so poorly in their treatment of smaller size business clients,” noted CFIB director of research, Doug Bruce.

“If they’re serious about becoming the bank of choice for small businesses, embracing the findings contained within this report will help them gain a competitive edge,” he explained.

IE