Banks squeeze more profit from customers


Banks have cut deposit rates and raised the profit they make on mortgages despite the headline cost of borrowing staying the same since the summer.

The new figures suggest banks are protecting their bottom line at the expense of savers and borrowers as interest rates peak.

Banks are preparing to post bumper profits after 14 base rate rises to curb inflation. 

Losing out: Lenders have been criticised for using the rise in interest rates as cover to raise profits by squeezing savers and fleecing borrowers

Losing out: Lenders have been criticised for using the rise in interest rates as cover to raise profits by squeezing savers and fleecing borrowers

NatWest is set to reveal on Friday that its net interest income – earned on the difference between what it pays savers and charges borrowers – leapt from £9.8 billion to £11 billion last year.

Lenders have been criticised for using the rise in interest rates as cover to raise profits by squeezing savers and fleecing borrowers. 

The base rate has been at 5.25 per cent since August but that hasn’t stopped banks. 

The average margin they make on a five-year mortgage has risen from 1.27 percentage points in June to 1.79 last month, according to investment bank UBS.

But one-year deposit rates are at 4.88 per cent, down from a peak of 5.33 per cent in October.



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