New de-banking figures show more than 140,000 business accounts were closed by major UK banks last year.
The data emerged from a Treasury Committee inquiry into whether SMEs have adequate access to financing.
The figures are based on information from Barclays, HSBC, TSB, Lloyds, Santander, NatWest, Metro and Handelsbanken.
Reasons given for the de-banking of businesses include risk appetite, financial crime concerns, lack of information-sharing and other reasons.
Chair of the Treasury Committee, Harriett Baldwin, says: “One of the most startling pieces of evidence emerging from our inquiry into Access to Finance for small and medium-sized business is the readiness of lenders to close business bank accounts with little or no notice.”
The categorisation of reasons for account closures varies between lenders. For example, Barclays broke their account closures down into six categories whereas TSB split their figures between two reasons – citing only financial crime and “where a business has been unable to satisfy verification requirements or has not responded to our attempts to contact them”.
Only three banks listed ‘risk appetite’ as a reason for bank closures, with 4,214 cases listed.
Says Baldwin: “We can see from these figures that thousands of small businesses fall foul of their bank’s risk appetite definition, leaving them without access to a bank account. I hope publishing this data can aid scrutiny of the decisions taken by banks and help to ensure legitimate businesses are not being unfairly treated.”
