Business banking news review: week ending 2 Jan 2014
At the dawning of the New Year, several banks and building societies are altering their offerings based on their profitability – leaving some high and dry.
First up is Norwich & Peterborough Building Society, who recently announced the availability of its Gold Light account is coming to an end, despite its popularity. The current account was quite well-received because its debit card carried no charges for use overseas, but now these halcyon days are coming to an end is to scrap a popular bank account which has a debit card that is free to use overseas.
You’ve got until 13 January to snap up the account before N&P pulls it forever and replaces it with one that strips away the no-fee debit card. You can still get the service, but you’ll have to shell out for the privilege – £5 every month if you fall below a £5,000 balance and neglect to deposit about £5 on a monthly basis in a different N&P offering. Luckily, you can keep you account if you already have one, but it’s cold comfort for anyone who misses the boat!
If you ask me, N&P is doing away with the free service due to profitability issues – something that’s on the mind of many banks. Indeed, Tesco Bank’s chief executive recently issued a warning that profits this year will be down because of its launch of its own current account offering.
Honestly this doesn’t really come as a surprise to me in the least, as launching a new offering like this is a major undertaking, especially for a supermarket chain that’s considered to be dabbling in personal and business bank account provision. Still, it’s a positive move for Tesco because the inclusion of a current account is the last step it needs to take before its financial services arm is up and running as a fully-featured banking provider in the UK.
Rumour has it that the new Tesco Bank current account is likely to carry a monthly fee, though there’s little else the industry knows about the offering. A pilot programme is set to launch early this year, but your guess really is as good as mine when it comes down to the particulars of the account and how it’s going to be marketed to the masses; I suppose we’ll just have to wait and see how this one develops!