HSBC has apologised to a Bristol-based developer for sending him a letter threatening to cut off his funding.

John Ward, founder of PMS Holdings, received a letter from the Bristol commercial lending branch of HSBC saying his £50,000 overdraft had been cut, his properties, mainly flats, had to be sold to pay off his debts and his rates would increase. It also charged a £2,000 fee.

However HSBC and Ward met on Friday and have now reached an amicable solution following the misunderstanding.

An HSBC spokesman said: ‘The tone of the letter was clearly inappropriate and we have apologised. He is a long standing customer and we hope that the outcome is now positive for both parties.’

Ward’s rates remain the same, and he agreed that he would try to sell the properties when the markets recovered to pay down the loan. In the meantime, he will use rental income to put against his borrowings. Ward said that PMS has nearly £1m in cash on deposit with several banks and assets worth £700,000.