Upcoming results from FTSE-listed high street banks will be monitored for excess profits after some have been told to get a move on by the City regulator after being too slow to raise interest rates on their savings accounts, while also penalising loyal customers in comparison with newcomers.
Standard Chartered PLC (LSE:STAN) kicks off bank results season next Wednesday, followed by Barclays PLC on 27 April and NatWest Group PLC (LSE:NWG) on 28 April.
The following week numbers are due from HSBC Holdings PLC (LSE:HSBA) on Tuesday 2 May and Lloyds Banking Group PLC wraps things up for the FTSE 100-listed lenders on 3 May.
As part of an investigation by the Commons Treasury committee investigating of how banks are passing on interest rates changes to customers, as well as the treatment of loyal customers, the Financial Conduct Authority said in its submission is "standard practice" for banks to offer more attractive rates to new savers, while leaving existing savers earning less competitive rates.
It said the "harm" to consumers from this is thought to have increased as the Bank of England has hiked interest rates from near zero to 4.25% since the end of 2021.
The FCA stressed: "We have been monitoring the speed and extent of firms’ pass-through to their savings products following increases in the base rate.
"We have challenged and sought further information from some outlier firms that had made relatively small increases to their variable rate savings products in 2022 and where we saw a material time lag in pass through to savings products relative to mortgages.”
Committee chair Harriett Baldwin said: “The regulator has now given us official confirmation that the UK’s biggest banks are profiting from interest rate rises and that loyal savers are being increasingly harmed.
“While it’s welcome to hear the financial regulator is monitoring this situation, we will be keeping a close eye to ensure they act on these assurances. Consumers should continue to shop around to get the best rates possible.”
She added: “With banks set to release their first quarter results in the coming weeks, we will be monitoring whether firms are continuing to squeeze profits from their loyal savings customers.”