Business banking news review: week ending 18 July 2013
Personal and business bank account holders have been up in arms lately about the failures on the part of their banking providers, and for good reason!
First up in news of people having had enough with their banks is how some £500 million has been withdrawn from The Co-Operative Bank’s savings accounts over the past few months. Sure, this may be a drop in the bucket for a financial service provider that has some £37 billion in deposits overall, but it’s a sign that the writing is on the wall – and that savers are having none of it any more.
The trouble began for the Co-op several months ago and doesn’t look to be stopping any time soon, especially now that the banking group is on the eve of a major restructuring effort that’s going to see anyone holding a fixed rate bond with the bank to take it on the chin when it comes to interest rates. Still, both banking executives and the Bank of England’s risk monitoring arm, the Prudential Regulation Authority, have said that the bank’s deposit profile is just fine for now; it’s that last part, the ‘for now,’ that has many people like myself thinking that this tune may change in a hurry if things keep on going south.
It was May when the Co-Op’s rating dropped like a stone after it backed out of the plan to buy some 630 Lloyds TSB branches. In the time since, several local authorities and quite a few matrix funds have pulled their deposits in search of slightly greener pastures.
Wherever they go, they’d better not switch to Ulster Bank or Bank of Ireland, at least not if they don’t want to end up dealing with even worst customer service. According to the latest research report from consumer campaigner Which?, the Bank of Ireland ended up with the dubious honour of having the worst-rated customer service satisfaction at an absolutely abysmal 41 per cent!
Maybe it’s just me but I really think it’s time for these banks to clean up their acts in a major way. Horrible customer service scores and depositors leaving in droves may be so-called ‘isolated incidents’ right now, but I’m telling you that things are going to get much worse if these banking executives don’t stop sticking to their massive bonuses – which they have decidedly not earned in my opinion – and start actually caring about their customers once more!