Treasury Committee publishes SME de-banking report

The Treasury Committee has published a report based on data from 8 of the largest banks that shows that banks have closed 2.7% of small business accounts during the past year. The banks also gave reasons for the closures, of which the most common were financial crime concerns, risk appetite and lack of information sharing – but the granularity of how banks break down or describe the reasons varies significantly.

Harriet Baldwin, Committee Chair, said that any company engaged in a “legal business activity” in the UK ought to be able to find a bank that will offer them an account. The Committee queried whether decisions on risk are more likely to be considered informally, and therefore not evidenced. The Committee hopes that banks will review the data in the report and that it will help them in making their risk decisions and, in turn, help to avoid unfair treatment of small businesses.

Emma Radmore