UK Banks Diminishing In Number

Throughout the recession that is still going on globally despite bits and pieces of good news here and there, the banks of the United Kingdom have continued to diminish in numbers and the banking system as a whole have become even more concentrated and consolidated. This is not a new concept in the UK as since the early 20th century banking precluded many independent players.

Currently, banks operating within the UK have developed and refined services with most of the top six banks offering similar services distinguishing themselves from their competitor though interest rate offerings. However, more often than not, UK banks rarely advertise their respective interest rates. This practice enables the bank to provide what would be considered their best rate to serve about 60% of their customers. Leaving customers to their own will to find the best prevailing interest rates offered by the UK Banks.

Another practice the Office of Fair Trading (OFT) discovered was that the banks were exercising penalty charges which are illegal under UK contract law. Subsequently, the OFT’s ruling was extended to many customers personal bank accounts inundating the UK small claims courts with claims of illegal penalties extending to these accounts.

The Top Six UK Banks according to a market capitalization report as of 2009 place, HCBC, Barclays, Standard Chartered, Royal Bank of Scotland Group, Lloyds Banking Group, and Co-Operative bank all in the top spots and as one would expect, the UK government owns a significant claiming stake both the Royal Bank of Scotland and Lloyds Banking Group although both still remain independent from the UK government.

Another lesser known type of financial service banking system within the UK are the Building Societies. These are institutions or financial systems are owned by their members and offer banking services like home mortgage loans and other similar type loans. Again since the early 1980’s these institutions have been frequently nationalized and have been absorbed into the larger financial institutions like such as Lloyds where other Building Societies have been nationalized by the UK government.