New player in the field
A NEW assault is being launched on the small business account market.
HBoS, formed from the merger of Bank of Scotland and Halifax, is trying to lure small business customers away from the main High Street banks by slashing its fees.
Barry Gardner, director of public relations at Bank of Scotland, said: 'HBoS is not only targeting existing Halifax retail customers but also trying to attract customers from the other major banks by waiving bank charges.
'It wants to compete first and foremost with the four main High Street banks - HSBC, Barclays, Lloyds TSB and Royal Bank of Scotland/Natwest - that dominate in England.'
However, HSBC does not see HBoS's rival bid as a threat. Steve Nightingale, marketing manager for business start-ups at HSBC, said: 'HBoS is offering services free of charge and we have charges. But our start-up customers get free banking for the first two years. And we don't know what HBoS's future plans are. Maybe in a couple of years' time they will start charging.
'Much has been said of charges. But we think the most important factor is customers' relationships with their bank - good advice and the bank's understanding of their business.'
Ann Crisp, business manager at Natwest, said: 'We have successfully competed with them in this area in the past. So we are confident we will beat HBoS in the future.'
Barclays and Lloyds TSB declined to make anyone available for comment.
The small business banking report published within a month by the independent Competition Commission will investigate the need for more competition in this market. And it will look into whether or not customers are being charged fairly.
The main benefits of HBoS's account include: no management charge; free transactions, such as direct debits, and standing orders and an interest rate of 1.31% on all balances up to £25,000.
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