According to data published by a parliamentary committee, more than 140,000 businesses had their accounts closed by the UK’s biggest banks last year. The lenders’ reasons for closing the accounts of small and medium enterprises included concerns over financial crime and fraud, customers’ failure to provide requested information and the banks’ risk appetite.
The closures are equivalent to about 2.7 per cent of the 5.3 mn accounts held by small and medium enterprises with the eight banks that provided data to the House of Commons treasury select committee as part of an inquiry into smaller businesses’ access to finance.
The banking sector has come under increased scrutiny on account closures since the controversy over the “debanking” of politician Nigel Farage in July, which led to the resignation of NatWest chief executive Dame Alison Rose.
The incident has led to broader questions about the reasons banks close accounts of individuals and smaller businesses. Lenders were asked in December by the committee to state how many SME accounts they hold, the number of closures in the past year and the reasons. The figures are based on the responses it received from the Big Four - Barclays, HSBC, Lloyds and NatWest - as well as Handelsbanken, Metro, Santander and TSB.