£80bn fall in deposits at UK’s four biggest banks

Additionally, while the “big four” – NatWest, Lloyds, HSBC and Barclays – still hold close to £240bn more in deposits than in 2019, rival lenders’ offer of higher interest rates is forcing them to improve their own deals.  

It comes after a period in which deposits were rising, first starting in the final quarter of 2019 before jumping by nearly £80bn in the second quarter of 2020 as pandemic curbs hit spending. They then peaked at more than £1.5tbn in the second quarter of 2022.  

The £78bn also follows comments made by the House of Commons Treasury select committee, which last month accused the big four of “blatant profiteering” by “squeezing higher profits from their loyal saving customers”. Meanwhile the Financial Conduct Authority has set a deadline for banks to justify low interest rates or face penalties.

Speaking to the Financial Times, a senior executive at a smaller bank said while rising living costs had contributed to the outflow, it has been largely driven by consumers withdrawing money to repay mortgages early.  
They explained: “I think some people are saying: ‘My mortgage is getting a bit expensive but I’ve got all this cash in my bank.’ So they’ll repay some or all of it, depending on how much money they have.”