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New de-banking figures show more than 140,000 business accounts closed by major banks

27 February 2024

Ahead of the final session of the Treasury Committee’s inquiry into whether SMEs have adequate access to financing, the Committee has published data showing 2.7% of accounts held by small businesses have been closed by their banks in the last year.

The data is based on figures from Barclays, HSBC, TSB, Lloyds, Santander, NatWest, Metro and Handelsbanken. Paragon were unable to provide the information. 


Reasons given for the de-banking of businesses include risk appetite, financial crime concerns, lack of information-sharing and other reasons. 


The figures come as the Economic Secretary to the Treasury, Bim Afolami, is set to appear in front of the Treasury Committee, where he is likely to be questioned on whether he believes small businesses in the UK are receiving a fair deal from their lenders. This will be the final session of the committee’s inquiry into access to financing for SMEs. 


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. It is noted, though, that this does not rule out the possibility of risk appetite being considered by those banks who didn’t explicitly list it in their criterion.


Chair's comments 


Chair of the Treasury Committee, Harriett Baldwin, said: 


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. 


Our Committee believes that any company engaged in a legal business activity in the UK should be able to find a bank to offer them a bank account.     


The fact that only three lenders included ‘risk appetite’ in their criteria indicates these discussions may not be systematically recorded – leaving questions over whether decisions on the de-banking of certain businesses, based on what banks perceive as a risk, are happening informally. 


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.” 

Further information

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