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Banks in the United Kingdom

Updated on March 19, 2024
Article byWallstreetmojo Team
Edited byWallstreetmojo Team
Reviewed byDheeraj Vaidya, CFA, FRM

Overview

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

With a staggering 40 billion payments made in 2017 alone, the UK banking sector has a deep banking penetration 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 type of bank caters to varying needs, from personal to business. 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 UK’s Central Bank and happens to be the world’s eighth oldest bank. The Bank of England is tasked with setting up and maintaining the country’s monetary policyMonetary PolicyMonetary policy refers to the steps taken by a country’s central bank to control the money supply for economic stability. For example, policymakers manipulate money circulation for increasing employment, GDP, price stability by using tools such as interest rates, reserves, bonds, etc.read more and financial stability.
  2. High Street Banks – High street banks are like retail banks with multiple branch locations. These banks provide retail services; they mostly serve the general public. 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 located in any commercial sector of towns and cities.
  3. Business Banking – Business banking services Business Banking ServicesBusiness banking refers to a bank or financial institution that focuses solely on businesses and corporate clients, offering products such as business loans, asset management, and electronic fund transfers that are tailored to their specific needs.read more are those which High Street Banks offer. These services are provided in addition to what an ordinary account can offer. Hence, these are provided as additional services and for a certain fee.
  4. Investment Banking – Financial institutions 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 customers, from individual corporations to governments. In addition, these institutes provide these investment banking services to invest in other companies and bond stocks. Banks in the 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 fundsPension FundsA pension fund refers to any plan or scheme set up by an employer which generates regular income for employees after their retirement. This pooled contribution from the pension plan is invested conservatively in government securities, blue-chip stocks, and investment-grade bonds to ensure that it generates sufficient returns.read more.
  5. Digital Banking – The UK digital banking landscape offers a competitive market with various innovative solutions, promoting convenience, accessibility, and enhanced user experiences. It is characterized by a thriving ecosystem of innovative and user-centric financial services. Established banks are increasingly investing in digital transformation, offering seamless mobile and online banking experiences to their customers. Furthermore, a wave of fintech startups are revolutionizing the industry with innovative solutions, including app-based banking, peer-to-peer lending, and roboadvisory services. The UK’s regulatory environment, notably with open banking initiatives, fostered competition and collaboration between traditional and emerging financial institutions, driving the rapid evolution of the digital banking landscape in the country.
    • Revolut – Experience banking like never before with “Revolut,” the app-based solution in the UK designed for the modern world that puts control at your fingertips. Seamlessly manage your finances, make swift global money transfers, and save with ease. Enjoy fee-free currency exchange and cryptocurrency transactions. With top-notch security features and a user-friendly interface, Revolut ensures your money is safe and accessible anytime, anywhere. Join millions who trust Revolut for secure, convenient, and rewarding banking. Sign up now and unlock a world of infinite financial possibilities!

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Wise
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– Dynamic digital financial and money management platform.

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Qonto
– Digital bank account and cards

– Can set transaction limits for each card

– Operates primarily in France, Italy, Germany & Spain
Rating 4.2/5

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 Group plc
  10. Coventry Building Society

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

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#1. HSBC Holdings:

HSBC Holdings has been deemed the seventh-largest bank globally and the largest in Europe in holding total assets. Although it was founded in Hong Kong in March 1865, it currently has its headquarters in the financial capital of the United Kingdom, London, and is the largest bank in the United Kingdom. It has a wide range of services from commercial banking, global banking, and global private bankingPrivate BankingPrivate banking refers to a type of banking and financial service offered by certain banks only to high-net-worth individuals (HNWIs). Clients opting for this service are individually assigned a financial representative who personally takes care of their banking needs.read more, retail banking, wealth management, etc. The bank’s name, HSBC, comes from the name used when it was founded in Hong Kong, namely, Hong Kong and Shanghai Banking Corporation.

#2. Lloyds Banking Group:

The Lloyds Banking Group is considered a major banking institution in the United Kingdom. It was founded in 2009 by acquiring HBOS and formed by merging HBOS and Lloyds TSB. Lloyds Banking Group has four subsidiaries: 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, provides various services to its customers, including corporate finance, business banking, insurance, and personal banking. It has its headquarters in Edinburgh, Scotland, with offices in other parts of the world.

#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. Most of its profitProfitProfit refers to the earnings that an individual or business takes home after all the costs are paid. In economics, the term is associated with monetary gains. read more is from Africa, Asia, and the Middle East.

#6. Santander UK:

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

#7. Nationwide Building Society:

The Nation Building Society is like a mutual fundMutual FundA mutual fund is a professionally managed investment product in which a pool of money from a group of investors is invested across assets such as equities, bonds, etcread more institution deemed the largest building society globally with 15 million members. It provides its members with current accounts, mortgagesMortgagesA mortgage loan is an agreement that gives the lender the right to forfeit the mortgaged property or assets in case of failure to repay the borrowed sum and interest.read more, 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 company Asset Management CompanyAn Asset Management Company (AMC) refers to a fund house, which pools money from various sources and invests the same in purchasing capital on behalf of their investors.read more headquartered in London. It has operations in Europe, America, Asia, Africa, and the Middle East, offering various services like retail banking, wealth management, commercial banking, and global banking.

#9. Close Brothers Group plc:

Close Brothers Group plc comes under the business bank category of banks. It is a merchant banking group that provides lending, deposit-taking, trading securities, and wealth management services. 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 is the second largest bank in the UK. Godiva Mortgages Limited, Coventry Building Society, and Covered Bonds are subsidiaries. It has various products and services to offer its members, including financial planning, mortgages, investmentInvestmentInvestments are typically assets bought at present with the expectation of higher returns in the future. Its consumption is foregone now for benefits that investors can reap from it later.read more services, savings products, and travel insurance.

We hope you liked this guide to an overview of the Top 10 Banks in the United Kingdom (UK). We discuss the structure and financial status of the banks in the UK. 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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