Have you noticed how our high-street banks increasingly resemble Tesco. Everything is a special offer: amid the BOGOFs (that's "buy one, get one free") and limited-edition discounts, one bank was even offering free £5 notes to customers recently. The days of the frock-coated bank manager, who just might give you a personal loan if he knew your father, are gone.
Maybe Andy Hornby is to blame. The chief executive elect of HBOS is credited with bringing the dark arts of retailing to retail banking, though in reality his deployment of Howard Brown and co was only an acceleration of a process that's been going on for 20 years.
Though we moan about our banks, in the UK we have a highly competitive financial system that allows us free current accounts, 24-hour access to cash for nothing and cheap mortgages; go anywhere else in the world and see if you get that.
Yet if you look at the results delivered by our banks, they all seem to be doing rather well, thank you very much. The return on capital employed at four of the big five that have reported so far (HSBC is this week) compares favourably with anything in financial services - look at the insurers if you don't believe me - and with the majority of their international peers.
However, this is not enough. It is not enough for the banks: Barclays, Lloyds TSB and HSBC are all taking a hard look at their UK operations to see how they might make them deliver more for less, while HBOS is expanding, for heaven's sake. And it is not enough for shareholders, who rate the UK banks poorly and see them as cash cows. Lloyds TSB has one of the highest dividend yields in the FTSE 100, while Royal Bank of Scotland's decision to give investors more than £3bn in cash over the next three years was cheered to the rafters.
At the same time, the banks' overseas competitors are shaping up for a new era of European consolidation. In Italy, after the central bank's protectionist policies got its governor in the soup, the market has suddenly opened up. ABN Amro and BNP Paribas have each snapped up a bank, and you'd have thought that Barclays, which has a charmingly named mortgage lender called Banca Woolwich, might like to do the same.
But Italian bank shares trade at a 30 or 40 per cent premium to Barclays, so a deal would be hard to justify.
It seems that shareholders would rather our banks were taken over by foreign bidders - Bank of America and Citibank are often mentioned, and BBVA of Spain is now added to the list. If our banks were doing a bad job, you wouldn't argue with that. But for the most part they aren't.
Has the FSA gone soft?
Hey investors, you've been Tangoed. You divvied up the cash to float Britvic on the stock market, and less than three months later it is telling you that the soft drinks market has gone flat.
What I want to know is what the FSA is going to do about this - that's the Financial Services Authority, not the Food Standards Agency, which also has an issue with Britvic over whether there are traces of benzene in some of its drinks. I would have thought that senior representatives of Deutsche Bank and Citi- group, which floated Britvic, should be called into the headmaster's office to explain this curious state of affairs.
And while it's at it, maybe the FSA should be having a word with Vodafone and its representatives in the City. How come prospects in Germany were, if not exactly rosy, not disastrous when Vodafone published its performance figures at the end of January? Then, five weeks later, it is slicing up to £28bn of goodwill from its balance sheet, largely because German mobile phones are a minefield?
Timely and accurate information is what the market needs to operate efficiently. If the FSA does not get good explanations for such incredible voltes faces, it is failing in its duties.Reuse content