It's subsidised by eye watering fees on unarranged overdrafts. When the FCA and CMA looked into it several years ago, the banks claimed they couldn't reduce overdraft fees or they wouldn't be able to afford to offer free bank accounts any more. Some challenger banks wanted it to be forbidden to describe such accounts as 'free'.

https://www.google.com/amp/s/amp.theguardian.com/business/20...