News story: UK banks to shut thousands of British expats' accounts 1 October 2020 at 9:28AM in Budgeting & bank accounts 66 replies 5.5K views

brianposter

Thrugelmir said:

No point in having a major UK industry governed by rules over which there's no control. Worst of all worlds. For banks off loading unprofitable current accounts is no bad thing given the broader challenges now faced with Covid. 

It seems probable that these would be relatively profitable current accounts given that they are likely to use the banks foreign exchange services and also maintain relative large balances.

Thrugelmir

brianposter said:

Thrugelmir said:

No point in having a major UK industry governed by rules over which there's no control. Worst of all worlds. For banks off loading unprofitable current accounts is no bad thing given the broader challenges now faced with Covid. 

It seems probable that these would be relatively profitable current accounts given that they are likely to use the banks foreign exchange services and also maintain relative large balances.

Current account provision has never been a particularly profitable activity for banks. Hence why banks internationally levy monthly account fees in the main. Rather than try and sell additional services. 

retiredinfrance

Thanks . We just use our current accounts to accumulate a hefty balance and transfer into euros via an exchange company when the euro rate is good. I suppose it is that we are still British in wanting to keep our assets in the UK.I actually wouldn't mind paying a UK bank a few as we have to do that here in France. I would have thought there would be a lot of Brits like us,as I know most of my friends here keep large amounts  sitting in the UK .Ah well, onwards......

brianposter

Thrugelmir said:

Current account provision has never been a particularly profitable activity for banks. Hence why banks internationally levy monthly account fees in the main. Rather than try and sell additional services. 

Maybe, like you, the banks have not noticed that expat accounts are relatively profitable, and there are also obvious suspicions about how banks calculate profitability.

phillw

brianposter said:
Maybe, like you, the banks have not noticed that expat accounts are relatively profitable, and there are also obvious suspicions about how banks calculate profitability.

I don't know how it's calculated or whether there is a more up to date report, but this is kinda interesting
 https://www.thisismoney.co.uk/money/saving/article-2268305/Banks-9bn-current-accounts-year.html
On average, banks made £146 in revenue from a standard current account in 2011, compared with £300 on a packaged account and £34 on a basic account, a report from the Office of Fair Trading found.

eskbanker

phillw said:

brianposter said:
Maybe, like you, the banks have not noticed that expat accounts are relatively profitable, and there are also obvious suspicions about how banks calculate profitability.

I don't know how it's calculated or whether there is a more up to date report, but this is kinda interesting
 https://www.thisismoney.co.uk/money/saving/article-2268305/Banks-9bn-current-accounts-year.html
On average, banks made £146 in revenue from a standard current account in 2011, compared with £300 on a packaged account and £34 on a basic account, a report from the Office of Fair Trading found.

I don't know if there is anything more recent in the public domain but the CMA's 2014 review of personal current accounts (PCAs), at https://assets.publishing.service.gov.uk/media/53c834c640f0b610aa000009/140717_-_PCA_Review_Full_Report.pdf, offers some insight into how they're viewed within the industry, which isn't entirely unanimous:

2.66 As set out in the introduction, we have not undertaken a profitability analysis of PCAs as part of this update but during the course of our work we have heard views that PCAs are cross-subsidised with other retail banking products. A report by Credit Suisse has reviewed the profitability of UK retail banks both at aggregate level and between products and found that mortgages and credit cards are the most profitable products, while current accounts (personal and business) are loss-making. We have also heard from one PCA provider that PCAs are loss-making for them.

2.67 This seems to suggest that there might be a degree of cross-subsidy between activities within retail PCA providers which, if true, could itself be distortive of competition. It might also represent a barrier to entry and expansion.

2.71 In general most PCA providers recognise that PCAs provide valuable opportunities for follow-on sales. TSB states in its prospectus that PCA customers are considered to be very valuable by PCA providers as they have historically been likely to hold other products (such as mortgages, savings and loans) with the bank providing their PCA. Another bank contemplating entry in the PCA market told us that offering PCAs was essential to be perceived as a ‘full-service bank’, However, PCA providers also pointed out that cross-sales were not guaranteed and that most customers had relationships with a number of financial services providers besides their PCA provider. One bank also stressed that PCAs remained a profitable product in its own right, and that they were not selling PCAs at a loss to capture the value of follow-on sales.

cydiane

Update on my bank saga - It turned out that  a friend in the UK,  has a relative  who works for HSBC,  I would have had a nervous  breakdown without her help. My Cynergy Bank Account is now closed this happened on 29 December, they gave me no help whatsoever, it was as if they just wanted rid of me once they had decided to  close my account.With the help of my friends relative   I now have an HSBC bank account  up and running.  A couple of days before Christmas I managed to complete arrangements  for my 2 small pensions to be paid into this account. It should have been a simple task but it turned into a nightmare, with long waits on the phone, all the paperwork  having to be certified  and the delays in the post being sent and delivered.  Then we come to the DWP and my state pension. as I said in a previous post.  I tried  to get them to pay it into the HSBC account and they said they couldnt find the sort code so it wasnt valid and the account didnt exist, which I told them was ridiculous,  as I had transferred money into it from my Cynergy bank account. to which I was told its not on our system !!!!  My next move was, -  I have been using Currencyfair to exchange £- €  and transfer the money from the UK to Cyprus for several years,  so I contacted them and asked if I could have my pension paid into my account they said yes no problem, It might not have been  a problem for them but it was for the DWP.  When I gave the man I was talking to the bank details, Iban no etc he said it was OK  then he changed his mind and said it wasnt, when I asked why he got annoyed and I ended up cutting him off. I phoned the following day and this time the lady I spoke to  told me the reason was my pension couldnt be paid into a third party account .??  I have my own account with Currencyfair.  Whilst I was talking to her I thought I would try once more to get them to pay it  my HSBC account, but no luck, she came up with the same answers as before. So for the time being I have got  to have my pension  paid in Euros  into my Cyprus Bank account, which I am not happy about, In answer to retiredinfrance's question, No they dont charge commission, but the rate is not as good as you would get with Currencyfair orTtransferwise). So my next step is, Now the Christmas and New Year celebrations are  over.  I will be making a complaint to the DWP.   

Wishing everyone  a peaceful healthy  2021. 

J_B

cydiane said:

 My Cynergy Bank Account is now closed this happened on 29 December, they gave me no help whatsoever, it was as if they just wanted rid of me once they had decided to  close my account. 

<snip>

Wishing everyone  a peaceful healthy  2021. 

And HNY to you too ... what you have omitted to tell us, is that Cynergy Bank used to be called Bank Of Cyprus UK, yet suddenly, they didn't want customers from Cyprus ... hmm

jsmith9

Not sure if this would work, but could you open a NS&I direct saver or investment account? As an expat you are allowed to. You will get a sort code and account number (generic NS&I) and a ref number - maybe DWP can pay payments into one of these? I believe you can xfer cash from your NS&I account to overseas bank accounts. 

Thrugelmir

phillw said:

brianposter said:
Maybe, like you, the banks have not noticed that expat accounts are relatively profitable, and there are also obvious suspicions about how banks calculate profitability.

I don't know how it's calculated or whether there is a more up to date report, but this is kinda interesting
 https://www.thisismoney.co.uk/money/saving/article-2268305/Banks-9bn-current-accounts-year.html
On average, banks made £146 in revenue from a standard current account in 2011, compared with £300 on a packaged account and £34 on a basic account, a report from the Office of Fair Trading found.

Overdraft charges being the main source of income back then. Take away the cross subsidy and those that contribute little will need to do so. Hence the increasing noise surrounding account charges for all.