The sector justifies this measure as part of its fight against money laundering and due to a lack of information. British subsidiaries of Spanish banks closed 3,586 deposits for SMEs.
Subsidiaries of the two Spanish banks with retail activity in the UK, Santander UK and TSB (Banco Sabadell), closed at least 65,734 current accounts of all types last year, of which 3,586 were for SMEs.dams (SMEs), according to information provided by both entities to the UK Parliament's Treasury Committee.
This data emerges from information provided to the body by a total of eight banks with a presence in the UK, which investigated whether SMEs have adequate access to bank finance. The figures published by that committee indicate that 2.7% of the current accounts of small and medium-sized companies will be closed in 2023. In total, 140,000 accounts were closed. The other six banks that participated in the analysis were Barclays, HSBC, Lloyds, NatWest, Metro Bank and Handelsbanken.
Treasury Committee Chair Harriet Baldwin (Conservative) explained, “One of the most troubling findings we have reached is the speed at which entities close their bank accounts with little or no notice.” He added: “I hope that publishing this data will help scrutinize banking decisions and ensure that legitimate companies are not treated unfairly.”
In the letter sent by Santander UK CEO, Mike Regnier, on 21 December, to Baldwin, he explains that on 7 December, the bank had a total of 477,750 SME accounts (these can be understood as companies with a turnover of up to 25 million ) pounds or 29.2 million euros), especially in sectors related to public administration and defense (115,822 accounts), professional, scientific and technical activities (60,980), construction (59,111), and wholesale and retail trade and engines (57,325).
More diligence in 2023
“In 2023, we were more diligent about keeping customer data up to date, which resulted in a greater number of closures, either because our requests for more information were not responded to or because we identified certain practices that were inconsistent with our risk profile. Such as those related to financial crime “This program will continue into 2024, so the number of closures during this type may be higher than usual,” the letter says, adding:
Santander closed only 0.5% of SME current accounts, the majority of which were concentrated in the sectors of trading (26% of 2,143 closed accounts), real estate (15%), public administration and defense (13%) and professional activities (9). %). The reasons given were four: failure to respond to a request for information (68%), suspicion of fraud or financial crime (21%), lack of alignment with the risk profile or non-compliance with certain policies (10%) and inactivity (0.5%). In total, the Bank of Cantabria closed 38,129 accounts of all types.
Strong relationships
Santander's letter to Parliament concluded: “The bank is proud of its proven track record in supporting SMEs, which is based on building strong relationships and understanding the specific needs of companies and entrepreneurs. The decision to close a customer's account is not taken.” “Rightly and the criteria by which we do this are very clear.”
The information announced in accordance with the letter sent by its subsidiary Sabadell on January 8 is less complete than that of Santander, for reasons of confidentiality, although it goes in a very similar direction.
The letter sent by its CEO, Robin Pollock, shows that the entity has 131,161 small and medium business accounts, of which a total of 1,443 were closed in 2023, or 1.1%. TSB closed 27,605 personal or company accounts at the request of the company itself.
the reasons
There are two main reasons: “One, because fraud has been detected on the client side or because, as an organization, we have sufficient indications that the account is being used to facilitate financial crimes. The other refers to companies with verification that the requirements are not met.” [de información] Or they did not respond to our attempts to contact them” via phone, SMS or regular mail.
“TSB is committed to building trust for the deposits of our business customers, and we recognize our important responsibility to support small businesses to start, thrive and grow,” Bullock concludes in the letter to Parliament.
The banks that closed the most UK business current accounts last year were Barclays (78,750 SME accounts closed out of 1.05 million), HSBC (25,395), NatWest (21,000) and Lloyds (8,115).
Coates scandal
In parallel, the Financial Conduct Authority (FCA) is preparing another report into access to current accounts in the UK following the scandal last summer, when it learned that Coutts Bank, a NatWest bank, had apparently closed two accounts of politician Nigel Farage. For political reasons. The scandal cost NatWest CEO Alison Rose her job.
Farage is the former founding MEP of the Brexit Party, and today he is the most recognizable face of the UK's reform political formation, to the right of the Conservative Party, which is stealing away disaffected voters from Prime Minister Rishi Sunak.
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