Big Four banks are ‘ripping off customers’: MPs blast Barclays, HSBC, Lloyds and NatWest for passing on a fraction of rate rises onto savers
Britain’s four biggest banks are ‘taking advantage’ of loyal customers to boost their profits and chief-executive pay, MPs have found.
The Commons Treasury Committee blasted Barclays, HSBC, Lloyds and NatWest for passing on only a fraction of base rate rises to savers.
The MPs have written to bosses of each lender asking them to explain why savings deals are so low when the Bank of England rate has risen from a historic low of 0.1 per cent in December 2021 to 4 per cent today.
It comes after the banks reported bumper ‘net interest margins’ – the gap between what they charge borrowers and pay savers.
The four biggest banks made £35billion from this gap in 2022, some £6billion more than the previous year.
The Commons Treasury Committee blasted Barclays, HSBC, Lloyds and NatWest for passing on only a fraction of base rate rises to savers
Their bosses were paid £19.8 million last year: Barclays’ CS Venkatakrishnan received £5.2million, Noel Quinn of HSBC got £5.6million, Charlie Nunn of Lloyds £3.8million and Dame Alison Rose of NatWest £5.2million. In the letter to Dame Alison, the MPs pointed out that her pay had risen 46 per cent from £3.6million in 2021.
SIMON LAMBERT: Are we allowing banks to rip us off?
We all know that banks and building societies like to pass on rate hikes in a more timely and complete fashion to borrowers than they do to savers.
Yet, as interest rates have been picked up off the floor and hurled into the sky over the past year,
Britain’s big banks have been thoroughly indulging themselves.
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> Read: How to get a better savings rate and ditch big bank rip offs
Bank bosses were questioned by the committee last month on why they were slow to increase savings rates but quick to hike mortgage and loan costs.
Committee chairman Harriett Baldwin, a Tory MP, said: ‘It is difficult to avoid the conclusion that our biggest banks are taking advantage of their most loyal customers to increase profits and chief-executive pay.’
The big banks are offering easy-access savings rates below 1 per cent.But ten other smaller providers offer more than 3 per cent on their easy-access accounts. Annual interest on a £10,000 pot at 0.55 pc is just £55, compared to £300 on 3 per cent.
The MPs have questioned how the four big banks determine what proportion of interest rate rises to pass on to their savings customers.
Anna Bowes, from expert rate monitors Savings Champion, said: ‘The banks are renowned for paying some of the lowest savings rates in order to increase profits [They] are making hay while the sun shines as interest rates have risen, allowing them to increase margins.’
CS Venkatakrishnan received £5.2million
Dame Alison Rose of NatWest received £5.2million, while Charlie Nunn of Lloyds received £3.8million