Co-operative Bank has halted loans to new business customers as it seeks to provide reassurances over its financial situation.
The bank, which was downgraded by Moody's earlier this month, is not altering its services to retail customers at this time, while current business clients will still have access to lending, Reuters reports.
"We are not offering new loans to new corporate customers but are continuing to provide facilities for existing customers," a spokesperson for Co-operative Bank remarked.
Concerns have been mounting over the bank's potential exposure to losses in the months to come and Moody's revised its debt rating to junk status, warning the firm may need "external support" to shore up its balance sheet - despite Co-operative describing its funding profile as "strong".
The bank posted annual losses of £674 million for 2012 in March, admitting that the economic downturn and forthcoming changes to regulatory requirements have created a need for it to "strengthen [its] capital position".
By Asim Shah