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Economy and Banking Sector of the United Kingdom

Financial Market Development

Financial Market Development
5.0 (max 7.0), 13th out of 138 countries
Banks' Soundness
5.2 (max 7.0), 59th out of 138 countries

According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in United Kingdom is scored 5.0 out of maximum 7.0 and ranked 13th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 5.1 (25th place).

Financial Market Development in United Kingdom.

Chart 1. Financial Market Development in United Kingdom. Source: WEF.


Soundness of banks is scored 5.2 bringing United Kingdom into the 59th place.

Soundness of Banks in United Kingdom.

Chart 2. Soundness of Banks in United Kingdom. Source: WEF.

Further Information

Banking Focus

Banks in the United Kingdom are mainly focused on the following areas:

  • corporate banking
  • housing financing
  • corporate and investment banking

Banking Supervision

The Governor and Company of the Bank of England

Financial Conduct Authority

Banking Sector Structure

Number of Banks
374
Consolidated Assets (2018)
9,930.45 bln EUR  (-0.34%)
Recent Changes (2018)
new banks: 15, closed banks: 7

Currently there are 374 credit institutions operating in United Kingdom.

In 2018 consolidated banking assets in the United Kingdom were 9,930.45 bln EUR. The consolidated banking assets' evolution is shown at Chart 3 below.

Consolidated banking assets in United Kingdom.

Chart 3. Consolidated banking assets in United Kingdom.

Recent structural changes (2013 - 2018) of the banking sector of United Kingdom are summarised in Table 1.

201320142015201620172018
Number of Opened Banks999161515
Number of Closed Banks23971347

Table 1. Recent structural changes in the banking sector of United Kingdom.

The list of the most recently opened banks in United Kingdom is provided in Table 2.

NameStart Date
Evolution Money Limited (new)October 2018
Raiffeisen Bank International AG Großbritannien (new)September 2018
BAWAG P.S.K. Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse AG Großbritannien (new)September 2018
BANCA POPOLARE DI MILANO (new)August 2018
RCI Bank UK Limited (new)June 2018
Triodos UK Limited (new)May 2018
KB Kookmin Bank London Branch (new)March 2018
AS LHV Pank (new)March 2018
Citibank UK Limited (new)March 2018
RBC INVESTOR SERVICES BANK SA (new)January 2018
 

Table 2. The most recently opened banks in United Kingdom.

All the credit institutions operating in United Kingdom can be classified into several categories. Table 3 summarises the number of banks in each category.

CategoryNumber of Banks
Banks177
Branches of foreign banks151
Building societies44
Central banks1
Savings banks1

Table 3. Number of banks by category in United Kingdom.

There are 151 branches of foreign banks from 37 different countries in United Kingdom. Table 4 shows 10 countries having the biggest number of branches in United Kingdom.

Country of OriginNumber of Branches
 Germany21
 France11
 United States8
 Luxembourg8
 Netherlands7
 Canada7
 Spain6
 Japan6
 Switzerland5
 Australia5

Table 4. Number of branches of foreign banks in United Kingdom grouped by country of origin.

Deposit Guarantee Scheme

Maximum Protected Amount
85,000 GBP

Deposit guarantee scheme is a financial stability mechanism implemented in many countries to protect bank depositors against the loss of their deposits in the case when a bank is unable to meet its obligations to depositors by compensating certain deposits held by depositors of the bank. This compensation is paid out from the contributions which banks have made into a deposit guarantee fund.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in United Kingdom are summarised in Table 5.

Maximum Protected Amount
85,000 GBP
Temporary High Balance
1,000,000 GBP
Scheme Participants
all credit institutions operating in United Kingdom (including branches of foreign banks)
branches of the United Kingdom's banks abroad
Eligible Depositors
private individuals
small companies
large companies with some exclusions
Non-Eligible Depositors
credit institutions
financial institutions
investment firms
insurance undertaking
reinsurance undertaking
pension funds
retirement funds
public authorities
Covered Accounts
current accounts
savings accounts
time deposit accounts
cash ISAs
savings bonds
Covered Currencies
all currencies, namely
  • GBP (Pound sterling)
  • foreign currencies
Paid In Currency
GBP

Table 5. Deposit guarantee scheme in United Kingdom.

Further Information

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local Currency (Pound sterling)
Aaa (prime)
Foreign Currency
Aa2 (high grade)

Local currency (Pound sterling) deposit ceiling for United Kingdom is set to Aaa (prime), foreign currency deposit ceiling is Aa2 (high grade).

Deposit Rates

Average Deposit Rate (Feb 2019, GBP)
1.11 %  (Jan 2019: 1.03 %)
In February 2019, an agreed annualised deposit rate in local currency (Pound sterling) of new contracts with agreed maturity up to 1 year between credit institutions and households was 1.11%.
Deposit Rates in United Kingdom.

Chart 4. Deposit Rates in United Kingdom. Source: ECB.

Further Information