Britain's five biggest banks are on target to boost the profit they make from each customer to more than £112 a year, despite a crackdown on unfair overdraft penalty charges.
Research published today by the computer company Group 1 Software will show that Barclays, HSBC, Halifax Bank of Scotland, Lloyds TSB and Royal Bank of Scotland will, on average, make a profit of £112.20 per customer this year, a 12 per cent increase on 2005.
The research is based on the interim results announced by the banks this month, where all five reported significant increases in profits. The banking sector is now the most profitable area of the UK economy, with profits generated per customer forecast to rise from £100.50 last year after an increase from £81.60 in 2004.
The increases are being achieved despite a threat to revenues from one of the industry's most lucrative areas. Earlier this year, the Office of Fair Trading warned that any penalty charge levied by credit card providers for late payment of bills was likely to be illegal if it was higher than £12.
All five banks have been hit by the ruling because they have significant credit card businesses. The OFT is also expected to announce a similar crackdown on penalty fees charged by banks when customers exceed their overdraft limits, an area that generates almost £5bn a year for the whole sector according to the consumer group Which?.
A campaign by Which? to persuade customers to switch current account provider has already been partially responsible for a doubling over the past two years of the number of people changing banks.
Richard Mason, of price comparison service Moneysupermarket, accused the banks of exploiting customers with hidden charges and poor rates of interest.Reuse content