Banks in britain at a phenomenal high |
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Published
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Mon, 14 Mar 2005 01:00
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Britain’s banks are now turning kings, what with the enormous sums they make each time you take a loan, use the overdraft or get convinced into buying a policy with the branch.
Among the biggies making the stirring revelation was HSBC admitting the highest profits ever by a UK company- a huge £10bn and above.
| Following closely were the Royal Bank of Scotland that showed £6.9bn profit: HBoS, the owner of Halifax and Bank of Scotland reporting £4.7bn profits; Barclays making £4.6bn profit and Lloyds TSB confirming about £3.36bn profit.
This disclosure definitely has created a stir in the finance market and muted opinions about a windfall tax being imposed on banks to shed off their glut are emerging. This perhaps led HSBC to display quite a misleading figure of £77 profit each personal customer. HSBC further went on to explain that its profits from the UK market were less than a quarter of its total earnings and therefore, it paid £698m as tax in the UK, which was just about what it earned from its UK customers.
Money Mail, however, went on to account the contribution by every customer to the banks’ treasury, and arrived at a startling £6,248 a year, notwithstanding the high commissions earned by banks on first selling a product. Banks reported to have earned £3bn from unauthorized overdraft charges and about £400m from late credit card bill payers in the past year.
These profit figures seem believable with 17.5% charged on credit cards and up to 30% levied on authorized borrowing. Moreover, only 0.1% interest is paid to a customer on his money stored in the bank account. What’s more, banks have their hands full with the grand commissions they earn from policy providers for each policy sold to a customer, like a good 25% of your household premium is taken away by the bank as commission for the policy sold.
Even if the endowments sold by a bank in the past are at a current deficit they continue to earn profits in the form of renewal commission, without having informed the customer at the time of the deal.
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