Britain’s largest banks have closed 2.7 per cent of accounts held by small businesses over the past year.

As part of an inquiry by the Treasury Committee into whether SMEs have adequate access to financing, it found that more than 140,000 business accounts have been shut down over a 12-month period.

The data was provided by the UK's major lenders, including Barclays, HSBC, TSB, Lloyds, Santander, NatWest, Metro, and Handelsbanken.

Chair of the Committee Harriett Baldwin said that the inquiry had found “startling” evidence of lenders choosing to shut down business bank accounts with little or no notice.

According to the banks, the reasons behind the de-banking of businesses include risk appetite, financial crime concerns, and a lack of information-sharing.

But the reasoning behind account closures varied between banks, with Barclays breaking its account closures down into six categories and TSB splitting its figures between two reasons.

Only three banks listed ‘risk appetite’ as a reason for bank closures, with 4,214 cases listed.

"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," explained 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."

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