A cross-party group of MPs is calling for the break-up of major high street banks, which they say are stifling competition and exploiting vulnerable customers.
The call is part of recommendations put forward by the all-party parliamentary group (APPG) for challenger banks and building societies after a two-year inquiry into competition across the UK banking sector. Together, six UK lenders – including HSBC, Barclays, Lloyds, NatWest, Santander and Nationwide building society – hold about 87% of the retail banking market, according to Reuters data from 2018.
The APPG report, which gathered evidence from industry associations, university professors, and challenger banks such as Monzo, concluded that the lack of competition meant big banks were able to “exploit more vulnerable customers at the expense of the better off”. It also found customers faced a loyalty penalty, where banks charged higher prices knowing that customers were unlikely to search for better deals.