How well is your bank doing?

I hear mixed reports about the banks. Some people and businesses report great difficulty in getting a bank loan for a good purpose, high fees and charges, even difficulty in keeping what banking facility they do enjoy. Others tell me things are more normal, and there is money to borrow for those who have a good reason.

I do not detect any better service or especially different credit policy at the banks where the public is a large an forced shareholder, than I do in the remaining private sector banks. It seems to be business as usual, as attenuated by the Credit Crunch.

There is a lack of decisive action at the semi nationalised banks, to cut their losses, cut their costs, sell off their overseas and investment banking arms, and concentrate what resource they do have on the UK domestic and commercial banking activities. Yet that is why I thought the government stepped in, to try to ensure a better flow of credit to families and companies.

I would like to hear from you about how your banks are behaving. Is there credit available? Have your banks been cutting staff and cutting costs? What has been happening to fees and charges?

In current conditions banks ought to be able to make good money on new business they undertake. The gap between their borrowing costs and their lending rates is high. They still have a lot of past business to sort out, with more write offs possible, so they are going to need to improve their service, write better business and reduce their costs if taxpayers arte to be soared big new losses.

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27 Comments

  1. Blank Xavier
    Posted June 11, 2009 at 12:16 pm | Permalink

    I’m in Amsterdam now, but I retain my UK bank account with the Co-Operative Bank. I phoned them recently for something or other – while I was on the phone to customer support, they asked me if I’d like a loan (which I find objectionable; I phone to get something done – advertising to me then is not what I want at all).

  2. oldrightie
    Posted June 11, 2009 at 12:27 pm | Permalink

    There is still very much a credit crunch. Bank liqudity is still weak, just propped up by all that stationary replacing real money as quantative easing eases us more into the quagmire of real debt.

  3. Cath
    Posted June 11, 2009 at 12:46 pm | Permalink

    I have just got off the phone to HMRC. I made a payment on behalf of my company to cover our PAYE & NI obligations. I received a message back from Lloyds TSB saying that they were having problems with HMRC accounts. HMRC tell me it is actually they who are having trouble with Lloyds. The last update the telephone operator could find was May 21st stating Lloyds were looking into it. I have put a cheque into the post but how much remains unpaid to the revenue?

  4. Sir Graphus
    Posted June 11, 2009 at 1:08 pm | Permalink

    I have a “High Interest Business Account” which suddenly, about July last year, started grievously offending under the Trade Descriptions Act.

  5. Jonathan
    Posted June 11, 2009 at 1:53 pm | Permalink

    I have about a year’s income in savings, and I am adding to that every month, currently by around half my take home pay.

    I’ve not had a bank try and sell me a loan for about two years now, and some of them are more keen than previously to have my savings. That doesn’t include Nationwide, and I’ve moved all my money out of there to other building societies that are paying much higher rates of interest.

    I’ve noticed that savings interest rates are beginning to creep up again after collapsing towards the end of last year, which is good news for me. I have to keep monitoring the rates I receive and move money around, but I am managing to get in excess of 4% now.

  6. Frustrated taxpayer
    Posted June 11, 2009 at 1:55 pm | Permalink

    As a long-standing personal banking customer with our bank (20+ years), I am unipressed by their current competence. The latest tactic from our bank is to cut our agreed overdraft (rarely used, but a reassuring facility) and then constantly offer personal loans at rates of over 8%. This followed on from calls to ask if we would like to remortgage – which are pretty stupid given an existing fixed-rate mortgage with the bank.

    On the business banking side they are taking the p**s. I sat in a meeting with a business partner (who is currently trying to expand his business) and his current bank manager. As a customer with a good track record the terms they wanted on a new account were ridiculous. If you couple that with the banks unwillingness to support new business customers who want to handle ecommerce payments using credit/debit cards, my impression is that the UK banking sector simply does not want to work with small business. They seem to have forgotten that they are there to provide a service rather than squeeze small business to pay for the failings of their senior management.

  7. Paul
    Posted June 11, 2009 at 2:11 pm | Permalink

    I am a Lloyds business and personal customer. My relationship manager of (20 years) has gone. My personal account manager has gone, I now get to deal with the local branch. The business section of the branch hasn’t been manned for 3 weeks. The queues are huge half the cash machines are permanently empty. There are less staff in the branch.

    Charges for normal business accounts have risen, credit card transaction costs have risen. My interest bearing deposit accounts have no discernable interest. I am not in need of overdrafts or loans so not able to judge availability of finance.

    Having been a personal and business customer for over 30 years I am livid that customer service which wasn’t that great before is now non existent. You can tell they are now a branch of the government they have no intrest whatsover in their customers.

    • jean baker
      Posted June 11, 2009 at 4:38 pm | Permalink

      I’ve held business and personal accounts with Lloyds for over forty years, suffered no rise in their charges and customer services are the same high standard as they’ve always been. Our local branch remains fully staffed and cash machines fully operational.

      Many longstanding customers like myself do wonder why Lloyds involved itself with (highly publicized) long protracted takeover in which Brown was (reported) to be influential – only for it to later emerge that horrendous amounts of toxic debts existed.

      • Paul
        Posted June 11, 2009 at 9:42 pm | Permalink

        Jean

        You obviously haven’t had the letter yet then. They have raised their business charges across the board. Got the To whom it may concern letter a couple of days ago.

        I am happy that you are satisfied with the service levels you receive. I am a “preferential” customer too and in my area ( Kent) the service is abysmal and all the quality staff are leaving in droves.

        • jean baker
          Posted June 12, 2009 at 3:08 pm | Permalink

          Communications we receive from Lloyds are always personally addressed. Let’s hope “all the quality staff (you know) are leaving in droves” (sounds like masses !) all manage to secure alternative ‘quality posts’ in depressed market conditions.

        • Paul
          Posted June 14, 2009 at 9:06 pm | Permalink

          Jean,

          In my area they didn’t have masses of good quality managers, the ones they did have, left. The 4 of them were all instantly employed by regional offices of other business banks due to the very high reputation they have amongst the business community here.

          Maybe I’m wrong but I detect the fact that you aren’t happy with my opinions on the service I receive from my bank. Not knowing where in the UK ( assuming that is where you are) you bank and on what basis I can’t comment on your experiences. I’m genuinley happy that you are pleased with the service you get. However 7 months to set up an online deposit account, sending me 5 credit card machines when I actually enquired about a failed payment . For 3 weeks running crediting the wrong amount to my account ( all in their favour) and then taking 6 weeks to rectify the situation and blaming their new cheque reading equipment but no sign of an apology are just some of the myriad of problems in the last 6 months.

          Do you work for Lloyds?

  8. oldtimer
    Posted June 11, 2009 at 2:21 pm | Permalink

    When the crunch struck, I diversified my deposits from my long standing bank (NatWest) to LloydsTSB and HSBC. Shocked by the LloydsTSB takeover of HBOS all cash now gone and account closed. Main banking transferred to HSBC late last year, just on tickover with small balances at NatWest.

    HSBC service is OK but could be better in the ISA department. I was impressed today when their credit card anti-fraud squad phoned me within minutes of my topping up two mobile phones with my cc.

  9. Acorn
    Posted June 11, 2009 at 3:31 pm | Permalink

    My Bank doing fine JR. Borrowing its money short term and very cheap; lending longer at very nice margin thanks. It is not fixing any rates longer than five years even though the government is guaranteeing everything. Ten year bond yields coming up nicely as are interest rate swaps; should push SVR mortgage rates over 7% soon

    BoE fumigator at work in the Vault removing toxics and replacing with government manufactured Charmin Bog Rolls, complete with Treasury logo on them; which we put back in the BoE for safe keeping.

    Expecting garage sale of state owned bank shares soon, which by the miracle of Enron style accounting will make a profit for El Presidente Gordo in time for his coronation next May. All guaranteed by the thick as a plank UK taxpayer naturally.

    My Bank gives thanks to whomever invented Central Banks; fiat money and the fractional reserve Ponzi banking scam.

    Must go now, I have just been offered a block of flats for fifty pence in the pound, its in a Labour marginal, so no probs getting the QE from HMG, or the Housing Benefit for the dosser tenants.

  10. Mike Stallard
    Posted June 11, 2009 at 3:34 pm | Permalink

    I am with the Nationwide.
    OK, our interest is not that good, but the service is excellent and we really do get recognised by name when we make an appointment with Steve, who gives us (free) advice about our small savings account. He appears to have all the time in the world and we are not kept waiting either. It’s a bit like the doctor.
    Apart from the tumble in our interest rates, you wouldn’t know that there was a war on.

    PS: off topic: Would you like to comment on the growing number of experts who are of the opinion that green shoots are springing up everywhere and the government is going to be out of the economic woods by, say, spring next year at the latest? Which is something that would, conveniently, pave the way for Mr Brown to get re-elected.

  11. Matt
    Posted June 11, 2009 at 4:57 pm | Permalink

    Mixed really John

    I had a £2m facility and took out a LIBOR swap for 5 years with LIBOR at 5.3%taken two years ago (It was my decision to take the swap but they did sell it hard, credit committee will look favourably on you and so on)

    Then in December 2008 the bank pulled the facility, but kept the LIBOR swap.

    I realise that the swap and facility are separate contracts, but I only took out the swap to cover the facility, I looked at all of the risk factors when I took the swap, and the model worked well even if base rates fell to 3% – one factor I foolishly didn’t consider was the swiping of the facility.

    So they prevented me from trading but I had to pay the swap. This when I, at their own admission, had breached no covenants.

    Had to sell shares at a loss to trade

    Now the bank have come back offered a new facility, but at 3% over base – I was at 1.5% (So there is no offset factor against the swap.
    Arrangement fee up a lot and introduction of a non utilisation fee.

    I’m not taking it up.

    I feel nervous dealing with them, there was no discussion when the facility was lost – they just said something on the lines of that I wouldn’t have complained had LIBOR gone the other way.

    They are right but that was beside the point. I wanted to cover a risk and they froze me out at the drop of a hat.
    Never take a swap – without considering the facility itself.

    • StevenL
      Posted June 12, 2009 at 12:08 am | Permalink

      Sounds like they stitched you up like a kipper!

      Another one I’ve noticed recently is that some of the high street banks seem to be re-packaging weird and wonderful securitised derivatives as savings products.

      In other words getting their retail savers to sell them put options on the FTSE100.

      I don’t trust any of them one bit.

  12. StevenL
    Posted June 11, 2009 at 5:16 pm | Permalink

    Mine’s changing it’s name to ‘Santander’ next year. I went in a few months to ask about starting a regular savings stocks n shares ISA but the girl who saw me said she wasn’t qualified to sell me one. So I just started one online with an asset management firm instead.

  13. Andy
    Posted June 11, 2009 at 6:19 pm | Permalink

    Hi John I know you where one of the few voices against the nationalisation of Northern Rock. I just wondered what your views are about the government forcing the valuer to value the former shares as not a going concern.

  14. Jim Pearson
    Posted June 11, 2009 at 7:21 pm | Permalink

    At the start of the year I applied for a morgage for the first time. Of all the banks, I found they were neither intrested or bothered until I mentioned my deposit(40%). The B.Soc were better, but I was surprised at how robotic the process was. The staff I spoke to always had to travel into my local branch to meet me, as they were site-sharing. I went for a morgage with Natwest in the end, 150k at 3.49% over 25yrs. Overall I hope not to have to talk to the banks/B.socs for a while.

  15. THE ESSEX BOYS
    Posted June 11, 2009 at 11:26 pm | Permalink

    We have mixed experiences. Barclays have been very heavy-handed in reducing credit card limits even for customers with excellent credit records whereas MBNA have continued to offer large sums for balance transfers at 1.9% (+3% fee) or less.

    New buy-to-let mortgages are very unattractive keeping us, and others who are keen to buy while prices are low, from adding to portfolios. However trackers already in place have seen mortgages of say £1000pm tumble to around £200pm giving phenomenal yields.
    Something in-between – say base plus 2% for those with a good credit history – would result in a big stimulus to the property market.

  16. Ad
    Posted June 12, 2009 at 12:05 am | Permalink

    Without sounding sycophantic I have been with HSBC all my life and have allways found their level fo service to be excellent. Recently there has been hardly any decline in service despite everything. To follow the point made previously I recently went abroad without telling them and they suspended my card and their anti fraud squads were in touch immediatley. I wouldn’t touch government owned banks with a bargepole. Governments cannot and should not run businesses.

  17. Richard
    Posted June 12, 2009 at 2:36 pm | Permalink

    Small professional practice employs about 10 people. Newly nationalised bank. We have a very small unsecured over-draft which we use as a cushion against cash-flow fluctuations inevitable when your income is based on the payment of fees and you have a payroll. Last year (when we had a record turnover) we sometimes exceeded the limit occassionally by say 20% but very rarely; and over-all we operated entirely within our limit over the business year. They loved us and invited us to ghastly rather extravagant macho corporate entertainments which we felt obliged to attend – where you could marvel at the decline in the educational standards of your Bankers. Always trying to lend us more money – we always declined.

    This year if we are £100 over our limit they threaten to return items (which would be hugely damaging) and managing them has become a daily problem in itself. They have flatly refused a modest increase in the limit such as would eliminate the need for the micro-management of the account. Still the discipline is very useful in the current market. So its the usual offer of an umbrella when its not raining story.

  18. Adam Collyer
    Posted June 12, 2009 at 5:57 pm | Permalink

    Barclays were selling heavily their “Tax Haven” ISA around a year ago with pretty attractive rates of interest. So I took one out. Now they have slashed the rate on that account and started a new much more attractive ISA. The new ISA of course will not accept transfers from other ISAs so you can’t switch to the new account. So it’s business as usual there then…

    Mortgage rules are certainly much more stingy than they were in terms of loan to valuation rate. Even a year ago, they would lend 95%. Now the maximum is 85%.

    It’s all very well saying they can make good money on lending, but if they have no money available to lend that’s not much good is it? They are stuck with limits on capital ratios etc and of course savers have been deserting thanks to the pathetic savings rates. The banks won’t start lending normally until savings rates go back to normal levels.

  19. alan jutson
    Posted June 12, 2009 at 7:47 pm | Permalink

    Popped into a couple of B Societies last week to see if they could accept direct payment from the Governments Work and Pensions Department, as my wife due a State Pension shortly.

    Nationwide very helpful with staff giving lots of leaflets on all types of accounts and rates.

    Bradford and Bingley staff just said all their rates were Crap (their words) at the moment, so we probably would not be interested !!!!!!

    Studied all of the rates, but it seemed to us that deferring the state pension for a year would give a 10.4% return, so no brainer really.

    Impressed with fraud squad of MBNA and TSB credit cards who picked up fraud on both cards as soon as they had been cloned by persons unknown.

    This credit card fraud now must be reaching huge proportions, as most of our friends and business associates have had problems over the past two years.

    Why do not credit cards have a photo on them ????

    Have noticed that the time you get from recieving a CC statement, to having to settle it, has reduced during the past year, also that the printed statement date always seems to be 5 days (at least) before you get it !!!!!!!

    Business friend had huge problems with Abbey National over many months, customer service did not seem to exist.

    Barclays has been ok with me for many years, still free business banking at the moment.

  20. Bazman
    Posted June 13, 2009 at 6:13 pm | Permalink

    Fred and his chums say their banks are doing very well. After technically going under anything is good. Ah well toodle pip old chap. Never did understand all that financial stuff. I wonder who he banks with these days? I personally use the ineternet as the high street is a waste of a morning.

  21. Adrian Peirson
    Posted June 13, 2009 at 6:55 pm | Permalink

    I wonder what effect this will have on our currency.

    http://macedoniaonline.eu/content/view/7023/53/

  22. Adrian Peirson
    Posted June 13, 2009 at 9:15 pm | Permalink

    A short video on Fraudulent Western Banking.

    http://www.youtube.com/watch?v=vVkFb26u9g8&feature=channel_page

    If Westminster Still believes that it is in the country’s best interest to borrow our worthless paper money at interest, rather than coin it ourselves free of charge can I ask you to lobby on my behalf that the Govt borrows worthless bits of paper at full face value from me instead of the Private bank of England.

    I promise to undercut the BofE by 500% and I’ll buy you a beer,

    hell I’ll buy you a Brewery.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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