MPs: Barclays, HSBC, Lloyds and NatWest are ‘ripping off savers’
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Big four banks ‘rob customers’: MPs object to Barclays, HSBC, Lloyds and NatWest for passing on a fraction of rate hikes to savers
Britain’s four largest banks ‘take advantage’ of loyal customers to boost their profits and top executives’ salaries, MPs have found.
The Commons Treasury Committee went on a rampage Barclays, HSBC, Lloyd’s And NatWest for passing on only a fraction of the base rate hikes to savers.
MPs have written to each lender’s bosses asking them to explain why savings deals are so low as Bank of England interest rates have risen from a historic low of 0.1% in December 2021 to 4% today.
It comes after the banks reported huge “net interest margins” – the difference between what they charge borrowers and pay depositors.
The four largest banks made £35bn from this gap in 2022, some £6bn more than the previous year.
The Commons Treasury Committee slammed Barclays, HSBC, Lloyds and NatWest for passing on only a fraction of key interest rate hikes to savers
Their bosses received £19.8 million last year: Barclays’ CS Venkatakrishnan received £5.2 million, HSBC’s Noel Quinn received £5.6 million, Lloyds’ Charlie Nunn £3.8 million and NatWest’s Dame Alison Rose £5 ,2 million. In the letter to Dame Alison, the MPs pointed out that her salary had increased by 46 per cent from £3.6 million in 2021.
Bank bosses were questioned by the commission last month about why they were slow to raise savings rates but quick to raise mortgage and borrowing costs.
Commission chair Harriett Baldwin, a Tory MP, said: “It is difficult to avoid the conclusion that our largest banks are taking advantage of their most loyal customers to boost the top executive’s profits and pay.”
The large banks offer low-threshold savings interest rates below 1 percent. But ten other smaller providers offer more than 3 percent on their low-threshold bills. The annual interest on a pot of £10,000 at 0.55 pc. is just £55, compared to £300 at 3 per cent.
The MPs have wondered how the four major banks determine what part of the interest rate rises they pass on to their savings customers.
Anna Bowes, from expert rate monitors Savings Champion, said: ‘The banks are known for paying some of the lowest savings rates to boost profits. [They] are making hay while the sun is shining while interest rates have risen, allowing them to increase margins.”
CS Venkatakrishnan was awarded £5.2 million
Dame Alison Rose from NatWest received £5.2 million, while Charlie Nunn from Lloyds received £3.8 million