Britain's biggest banks are resorting to high-street retailer-style new year sales in an attempt to retain market share and win business from each other. Three of Britain's big four banks have this week launched cut-price savings and mortgage deals, designed to coincide with the busiest period of the year for customers switching accounts.
HSBC, which pioneered the concept of a January financial sale in 2005, this week launched the Green Sale, offering cheap deals on mortgages and credit cards, as well as higher savings rates. The bank is also making donations to environmental charities for each new account opened.
This year, however, HSBC's leading rivals are also piloting special offers, though not specifically branded as sales.
Barclays Bank yesterday announced it would offer an annual interest rate of 12.5 per cent to current account customers opening a Regular Saver account before 28 February, a deal that will top the best-buy tables by a considerable margin. The bank's mortgage arm, Woolwich, simultaneously unveiled a new range of cut-price home loans. Lloyds TSB, meanwhile, has launched a new fixed-rate mortgage costing just 1.99 per cent in the first 12 months.
Stuart Glendinning, managing director of the price-comparison service MoneySupermarket, said the initiatives were designed to get more people into bank branches and to boost customer retention.
"January and February are the two busiest months of the year from a personal finance perspective as people make concerted efforts to get to grips with their financial affairs," Mr Glendinning said. "These sales are as much about persuading customers not to shop around and take their business elsewhere as they are about actually recruiting new customers."
A spokesman for HSBC said the popularity of the bank's two previous new year sales had forced its rivals to follow suit. "This does reflect the very fierce level of competition."
Most of the deals are available primarily to customers coming into branches. Increasing branch footfall gives providers better opportunities to cross-sell non-sale products.
However, even smaller players are getting in on the act. Leeds Building Society yesterday announced a "New Year Sale" offering £1,000 off the fees it normally charges for arranging its mortgages.Reuse content