As we approach Easter and a Bank Holiday Monday – you cannot have failed to notice that the Banks have been in the news again this week, notably the problems in Cyprus and the re-opening of their banking system today. There was also the news from the Bank of England, which essentially told Britain’s banks to hold larger sums on deposit to improve their capital adequacy by a few £billion. This is likely to delay the return of the largely nationalised banks into the private sector and the main players will all seek to raise funds – either from selling off bits of their businesses or raising money through share/bond issues. The concern is that this will also lead to further tightening of lending criteria.
Today’s news is that what was once Abbey National, Alliance & Leicester and a few others (now Santander) have closed their investment advice services, well to the majority of the public anyhow. Today they announced 724 jobs culled leaving a team of 150 to support Santander investment customers UK-wide. We knew this was coming as they had to suspend their advice services due to having identified that their staff and systems were not ready for RDR (see the previous post). In addition they have some ongoing problems about bad advice to resolve with the FSA.
Life for the Banks continues to be pretty difficult, but few have much sympathy for them given the years of overcharging and mis-selling (not that this was exclusively the domain of Banks). However, we need a good banking system to help the economics of our society to function. I would like to see retail banks help people manage their finances better, do the basic stuff well, not constantly attempt to sell anything they can from roadside recovery to VIP airport services. As for attracting new customers? well we know that the average person is more likely to get divorced than leave their bank, so why on earth are millions spent sponsoring sporting events… particularly when this is really the taxpayers money? So as it is Easter, I wonder if we are collectively ready to forgive the Banks and permit them to have a resurrection experience?
The office will be closed for Good Friday and reopening on Tuesday 2nd April. Have a happy Easter.
Dominic Thomas: Solomons IFA