Lloyds Bank to withdrawal interest payments on business current accounts

In a move which is sure to upset the UK business arena, Lloyds Bank has announced plans to withdraw interest payments on business current accounts, which is currently the norm at Bank of Scotland. While in reality Bank of Scotland business accounts have received zero interest for some time, due to the fact that the rate is set at two percentage points below base rates, businesses will miss out on potentially hundreds of millions of pounds of interest on their business current accounts as and when UK base rates rise.

Bank of Scotland was the first bank in the UK to introduce interest payments to business current account and many believed this was a significant turning point in the UK business banking arena. However, Lloyds Bank has now "rebalanced the difference between Lloyds Bank customers and Bank of Scotland customers" to the detriment of the business arena. At a time and businesses in the UK are struggling to make ends meet, finding liquidity very difficult to come by and ultimately struggling to maintain cash flow and profit margins, this is the last thing they needed.

Whether other banking operations will follow suit remains to be seen.