Banks in the United Kingdom

Overview

The banking sector in the United Kingdom is regarded as the largest in Europe and it is considered to be the fourth largest in the world. Banking in the UK is highly developed, with new entrants in the sector being driven by cutting-edge technology and innovation. It also considered being the largest financial center in the world for cross-border lending.

With a staggering amount of 40 billion payments made in 2017 alone, the UK’s banking sector has the deep penetration of banking across the country. Banks in the United Kingdom can be demonstrated by the fact that nearly the entire population of the UK has a debit card and about two-thirds of the population is said to have a credit card.

Banks in the United Kingdom

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Structure of Banks in the United Kingdom

There are different categories of banks in the UK. Each category of banks caters to varying needs, ranging from personal to business needs. Listed below are the four major categories of banks in the UK.

  1. Central bank – In the UK, the central bank is the Bank of England or BoE. The Bank of England is the central bank of the UK and also happens to the world’s eighth oldest bank. The Bank of England is tasked with setting up and maintaining the monetary policy and financial stability of the country.
  2. High Street Banks – High street banks are like retail banks that have multiple branch locations. Given that these banks provide retail services, they mostly serve the general public. This means that instead of targeting a specific market or type of customer, they service a wide range of customers. A major characteristic of high street banks is that they are widespread and are located in any commercial sector of both, towns and cities.
  3. Business banking – Business banking services are those which are offered by High street banks. These services are provided in addition to what an ordinary account can offer. Hence, these are offered as additional services and for a certain fee.
  4. Investment banking – There financial institutions that offer investment banking servicesInvestment Banking ServicesInvestment banking is a specialized banking stream that facilitates the business entities, government and other organizations in generating capital through debts and equity, reorganization, mergers and acquisition, etc.read more to a range of customers, from individuals, corporations to governments. These investment banking services are offered by these institutes wherein they invest in stocks of other companies as well as in bonds. Banks in United Kingdom services are provided on behalf of the high street banks, investment trustsInvestment TrustsAn investment trust is a publicly traded financial institution that operates as a closed-end fund (CEF) and invests in shares or financial assets on behalf of its investors or other organizations. The value of the amount of money invested in an investment trust is dependent by the demand and supply for the invested share or financial asset, as well as the underlying value of the assets owned.read more, and pension funds.

List of 10 Top Banks in the United Kingdom (UK)

  1. HSBC Holdings
  2. Lloyds Banking Group
  3. Royal Bank of Scotland Group
  4. Barclays
  5. Standard Chartered
  6. Santander UK
  7. Nationwide Building Society
  8. Schroders
  9. Close Brothers
  10. Coventry Building Society

The banks in the UK have gone through a major transition over the past decade. Currently, a major share of the banking sector is occupied by a few large banks. The top five largest banks are HSBC Holdings, Lloyds Banking Group, Royal Bank of Scotland Group, Barclays and Standard Chartered. This handful of banks have a monopoly on the supply of services to these enterprises. Let us now look at some of the history and current status of the topmost banks in the UK.

#1. HSBC Holdings:

In terms of total assets held, HSBC Holdings is deemed to be the seventh-largest bank in the world and the largest one in Europe. Although it was founded in Hong Kong in March 1865, it currently has its headquarters in the financial capital of United Kingdom, London and is the largest bank in United Kingdom. It has a wide range of services ranging from commercial banking, global banking, global private banking, retail banking, wealth management etc. The name of the bank, HSBC comes from the name that was in use when it was founded in Hong Kong, namely, Hong Kong and Shanghai Banking Corporation.

#2. Lloyds Banking Group:

The Lloyds Banking Group is considered to be a major banking institution in United Kingdom. It was founded in 2009 by acquiring HBOS. In fact, it was formed by the merging of HBOS and another bank, Lloyds TSB. Lloyds Banking Group also has a set of four subsidiaries, namely, Lloyds Bank, Halifax, Bank of Scotland and HBOS. It is considered the second largest bank in the United Kingdom and is headquartered in London.

#3. Royal Bank of Scotland Group:

The Royal Bank of Scotland or RBS Group is a retail banking company that provides various services to its customers ranging from corporate finance, business banking, insurance, and personal banking. It has its headquarters in Edinburgh, Scotland with offices in other parts of the world as well.

#4. Barclays:

A multinational investment bank and financial services company, Barclays is headquartered in London and operates in around fifty countries worldwide. Barclays offers various investment banking services like corporate banking, personal banking, insurance and wealth management.

#5. Standard Chartered:

Standard Chartered is a multinational banking and financial services company. Even though it is headquartered in London, It is a financial services company that does not offer any retail banking services in the United Kingdom. A major portion of its profit is from its operations in Africa, Asia, and the Middle East.

#6. Santander UK:

Santander UK is a financial services company that offers commercial banking, retail banking and global corporate banking services. It offers its services through various channels like ATMs, internet, digital, mobile, telephone etc.

#7. Nationwide Building Society:

The Nation Building Society is like a mutual fund institution which deemed to be the largest building society in the world with 15 million members. It provides its members with the current account, mortgage, savings and personal financesPersonal FinancesPersonal Financing is a way of saving, investing, and growing an individual's money. It can be for an individual or a family as a whole and requires some level of financial literacy such as tax laws, investment opportunities, etc.read more related services.

#8. Schroders:

Schroders is an asset management companyAsset Management Companyset Management Company is a company that takes the financial assets of a person, company or another asset management company (generally this will be high net worth individuals) and use the assets to invest in companies that use those as a operational investment, financial investment or any other investment in order to grow the investment.read more headquartered in London. It has operations in Europe, America, Asia, Africa and the Middle East. It offers various services like retail banking and wealth management, commercial banking and global banking.

#9. Close Brothers:

Close Brothers comes under the business bank category of banks. It is a merchant banking group that provides services like lending, deposit-taking, trading securities, and wealth management. They provide lending to individuals and small businesses and offer deposits to UK businesses and individuals.

#10. Coventry Building Society:

A building society based out of Coventry in England and is deemed as the second largest bank in the UK. It has Godiva Mortgages Limited, Coventry Building Society and Covered Bonds as its subsidiaries. It has various products and services to offer to its members, ranging from financial planning, mortgages, investment services, savings products, insurance including travel insurance.

We hope you liked this guide to top banks in the United Kingdom. If you are looking forward to making a career in Banking, then you can check out some of the awesome resources –

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