uSwitch.com comments on the banking reporting season

Following HSBC’s Group profit announcement of £12 billion which is the highest to date, Nick White, Director of Financial Services at independent price comparison and switching website uSwitch.com, comments on the banking reporting season:

“As predicted, record profits totalling £40 billion have been reported by the banks over the past two weeks which is great news for the banking industry. However, these banks have also reported £13 billion of write off’s in 2006, which equates to one third of the overall profits. This provides strong evidence as to why consumer debt in the UK is such a growing problem with one person falling victim to insolvency every minute of every working day.

“To put this write off into context, for every adult with a current account in the UK this equates to £326.97 per person compared to £1,000.72 profit. Going forward, we hope to see this figure reduced considerably by the end of 2007 and if banks introduce stricter lending criteria in the retail banking arena, there is no reason why it shouldn’t be.

“Overall it has been an interesting couple of weeks with record profits being delivered by the banking industry yet again. We shouldn't lose sight of how important banks are to the economy, but at the same time individual consumers need to be very aware of their own bank, their own products and any new charges being introduced. We have seen several big banks introduce new charges over the past few weeks in the areas they haven't previously charged for and all consumers should be on their guard during 2007.”