As consumer debt spirals out of control banks continue to cash in

Recent figures have shown that despite rising levels of consumer debt and record levels of bad debts, banks in the UK are continuing to cash in and make huge profits from consumers – in fact, figures indicate that banks are making almost double the amount of profit that they were making a decade ago from their customers.

In 1997 each personal account earned the bank around one hundred and thirty pounds a year in profits. However, ten years on each personal account is netting the banks over two hundred and thirty pounds a year.

The biggest nine banks in the UK have also seen profits rise by one hundred and fifty percent, with collective profits of over thirty billion pounds. This shows that although consumer debt in the UK has rocketed to nearly one and a half trillion pounds, and record numbers of people have had to see financial solutions such as bankruptcy or IVAs in order to deal with their debt, banks are still sitting pretty and making huge profits from struggling consumers.

The Liberal Democrats have been urging government officials to take a stance on the banking and finance industry.

Finance spokesman for the party, Vincent Cable, stated: 'An annual profit per customer of £230 is completely unjustifiable. It is particularly distasteful that this news comes at a time of spiralling personal debt and increasing numbers of bankruptcies.'

He added that Gordon Brown has done little to deal with the problems highlighted in relation to the finance industry, stating: 'Banks are still enjoying excessive profits, based all too often on the exploitation of vulnerable customers through unfair, and in some cases illegal, bank charges.

The Government's piecemeal attempts to deal with these issues have seen a complete failure to implement any of the recommendations made in the Cruickshank report. Gordon Brown said that banking services must be exposed to the full rigours of competition. It is high time that the Chancellor made good his word.'

Tom Smith
01.03.07

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