Why have the deposits at the UK's four largest banks, including NatWest, Lloyds and HSBC declined?

The deposits at the UK's major banks, namely NatWest, Lloyds, HSBC, and Barclays, have encountered a substantial decrease of approximately £80 billion over the last year. This decline can be attributed to a combination of factors. Firstly, retail and corporate customers are seeking higher interest rates for their savings, which has prompted them to explore alternative options. Concurrently, households are grappling with escalated living costs, leading mortgage holders to pay off their loans early in order to mitigate potential financial strains arising from higher interest rates.

In the 12 months leading up to June 2023, the "big four" banks collectively witnessed total outflows of around £78 billion. Although these banks still retain roughly £240 billion more in deposits compared to 2019, they are facing intensified competition from other lenders that offer more attractive interest rates. As a result, customers are transitioning from current accounts at major banks to savings or fixed-term deposits at smaller peers. Benjamin Toms, an analyst at RBC Capital Markets, emphasizes that this migration is particularly notable among retail customers, while in the corporate sector, the hunt for higher yields from corporate Treasury departments is driving significant changes.

Smaller businesses have also contributed to this shift as they repay government-backed loans, which had remained unused in their accounts, obtained during the pandemic. Additionally, customers with surplus deposits have opted to pay down debts, including mortgages and credit cards, in response to an increased cost of living.

In light of the current environment of elevated interest rates, banks are facing pressure to promptly pass on the benefits of these higher rates to their savers. The House of Commons Treasury select committee has criticized major banks for profiteering by withholding benefits from loyal savings customers. The Financial Conduct Authority (FCA) has also set a deadline for banks to justify low interest rates or face penalties. Consequently, major banks are improving rates on instant access accounts, albeit lagging behind some rivals. Despite these measures, the outflows are driven by various reasons, including consumers withdrawing funds to repay mortgages early, influenced by the desire to offset potential expenses due to higher rates.

If you would like to learn more about investing for passive income, just contact me at www.benjaminzmiller.com search linkedin.com or meetup.com for “Benjamin Z Miller”. If you learned something from this video, maybe share it with your friends. You might be able to help them also. I hope that helps and good luck with your investing!

CONTACT INFO:
[email protected] (deals here, please)
[email protected] (general questions / contact)
www.benjaminzmiller.com (website)

ADDRESS:
The Benjamin Z. Miller Organization
1321 Upland Drive #8316 , Houston Tx 77043.
United States

SOCIAL MEDIA:
https://www.linkedin.com/in/benmillersells/
https://www.instagram.com/benjaminzmiller/
www.twitter.com/BenjaminZMiller
https://www.tiktok.com/@benjaminzmiller

BENJAMIN Z MILLER’S OTHER GROUPS & MEETINGS (You are Invited)

(Multifamily Sunday Meeting at 1PM Pacific Time)
https://www.linkedin.com/events/multifamilyinvestorgroupmeeting7038561468681728000/

(Investor Networking Group - Sunday at 6:30PM London Time - General Meeting)
https://www.meetup.com/benjamin-z-millers-investor-networking-group/

(Ukraine Networking Group)
https://www.meetup.com/kiev-social-for-international-expatriates-and-ukrainians/

(Rebuild Ukraine - Reconstruction Bonds Thursday at 6:30PM UK London Time)
https://www.linkedin.com/events/thursday-6-30pmuk-earningpassiv7018193682331754496/

(Cork Ireland Real Estate Investing - Thursday at 5PM Irish)
https://www.linkedin.com/events/secureyourretirement-passiverea7047600048674643968/comments/

(US Mortgage Investing - Thursday at 1PM UK time)
https://www.linkedin.com/events/1pmuktime-passiveincomeforukinv7018178368969846786/

(Feedban News Reader - Thursday at 4PM UK time)
https://www.linkedin.com/events/discoverfeedban-scutting-edgene7047964255236628480/

#benjaminzmiller #passiveincome #mezzaninelending #mezzanine #buildpassiveincome
#passiveincomeproperties #passiveincomestrategies #gilts #bonds #financialfreedom #passiveincomemindset #residualincome #passiveincomelifestyle #mezzaninelending #mezzanine