Banks squeeze more profit out of customers
Banks have cut deposit rates and increased profits on mortgages, even as the overall cost of borrowing has remained flat since the summer.
The new figures suggest banks are protecting their bottom lines at the expense of savers and borrowers as interest rates spike.
Banks are preparing to post huge profits after fourteen key rate hikes to curb inflation.
Losses: Lenders have been criticized for using the interest rate rise as cover to boost profits by squeezing savers and robbing borrowers
NatWest will reveal on Friday that its net interest income – earned on the difference between what it pays to savers and what it charges to borrowers – rose from £9.8 billion to £11 billion last year.
Lenders have been criticized for using the interest rate rise as cover to boost profits by squeezing savers and robbing borrowers.
The base interest rate has been 5.25 percent since August, but that has not stopped the banks.
The average margin they make on a five-year mortgage has risen from 1.27 percentage points in June to 1.79 last month, according to investment bank UBS.
But the interest rate on one-year deposits stands at 4.88 percent, down from a peak of 5.33 percent in October.