The spread of U.K. bank branch closures has forced financial institutions in the market to halve their small business lending operations over the last three years, according to reports.
Analysts Thursday (June 30) said top U.K. banks HSBC, Barclays, Royal Bank of Scotland and Lloyds Banking Group have dramatically reduced their SME lending volumes since 2013 in the areas in which branch closures occurred. The conclusion was reached by researchers at the Move Your Money campaign group.
Move Your Money found that local small business lending was reduced by up to 63 percent in some towns affected by a branch closure.
Analysis found a whopping 104 percent drop in lending growth to small businesses within towns that had their last bank branch closed, the data revealed.
“The U.K.’s biggest banks are abandoning communities across the country, and today for the first time we can see the incredible damage that is happening,” said Move Your Money campaign manager Fionn Travers-Smith in a statement.
According to reports, data regarding the impact of bank branch closures was unavailable until 2013 when the British Bankers’ Association began offering data on lending patterns across geographical markets.
Reporters at CNBC said the Big Four banks did not return requests to comment. A spokesperson for the British Bankers’ Association said financial institutions have agreed to protocols that look to minimize any impact their branch closures may have on surrounding communities.
The U.K. has made efforts to increase competition in the banking industry and heighten access to financing for SMEs over the last few years. The efforts have led to a rise in so-called challenger banks, which are smaller competitors.