Start-ups bank on HSBC for success in 2005

HSBC is the most ‘small business friendly’ bank, according to fresh research that shows 22 per cent of all new start-up accounts opened this year are registered to the high street lender.

As a result, NatWest has seen its share of the start-up market plummet to 20 per cent, despite retaining the most small-firm accounts in total.

According to figures obtained by the Daily Telegraph, Barclays is second overall in the UK for its number of start-up accounts, but has also seen its share slip on the back of advances by Lloyds TSB.

TNS, the research firm, calculates Lloyds to have amassed 21 per cent of start-up accounts so far this year, putting it second only to HSBC, yet marking a slight decline over the past two years.

Such a decline means Lloyds now controls 19 per cent of the UK start-up market – the same rate of accounts enjoyed by HSBC, which has accelerated its dealings with small businesses by one per cent over the last year.

John Rendall, HSBC's head of commercial banking, said the success at signing up new start-up ventures was down to “reputation and recommendations.”

“As a start-up customer, it's a real step into the unknown and it's difficult to work out what the best deal is as you have not started your business yet," Rendall said.

"When we research the reasons why people choose banks a lot boils down, at times of personal uncertainty, to 'How confident do I feel about the person I am talking to?’”

Lloyds meanwhile said its success in the small business banking sector could be traced to its account switcher package, which offers six month free banking, and its start-up account package, offering 18 months free banking.

According to the company, this has helped it overtake NatWest and achieve a start-up bank account share of 21 per cent.

Of the also-rans, Royal Bank of Scotland and Abbey National hit between 3 and 4 per cent share, followed by Bank of Scotland at 3 per cent and Yorkshire Bank on 2 per cent.

Banking giant Alliance & Leicester reported increases this year on new accounts of up to 35 per cent, elevating their share of the market to just under 2 per cent.

A company spokesman said: “"We offer banking that is value for money, that is simple to understand and easy to operate."

 

9th August 2005

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