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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

Deposit Guarantee Scheme

Maximum Protected Amount
85 000 GBP

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

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 1.

Scheme Participantsall credit institutions operating in United Kingdom (including branches of foreign banks), branches of the United Kingdom's banks abroad
Eligible Depositorsprivate individuals, small companies
Covered Currenciesall
Maximum Protected Amount85 000 GBP
Paid In CurrencyGBP

Table 1. 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 (Dec 2017, GBP)
0.84 %  (Nov 2017: 0.94 %)
In December 2017, 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 0.84%.
Deposit Rates in United Kingdom.

Chart 3. Deposit Rates in United Kingdom. Source: ECB.

Further Information

Banking Supervision

 The Governor and Company of the Bank of England

Banking Sector Structure

Number of Banks
383
Consolidated Assets (2016)
10 935.75 bln EUR  (-4.81%)
Recent Changes (2016)
new banks: 18, closed banks: 13

Currently there are 383 credit institutions operating in United Kingdom.

In 2016 consolidated banking assets in the United Kingdom were 10 935.75 bln EUR. The consolidated banking assets' evolution is shown at Chart 4 below.

Consolidated banking assets in United Kingdom.

Chart 4. Consolidated banking assets in United Kingdom.

Recent structural changes (2013 - 2016) of the banking sector of United Kingdom are summarised in Table 2.

2013201420152016
Number of Opened Banks98518
Number of Closed Banks229713

Table 2. 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 3.

NameStart Date
 Monzo Bank Ltd (new)December 2016
 BFC Bank Ltd (new)November 2016
 Caceis Bank France (new)October 2016
 Clearstream Banking S.A. (new)September 2016
 Mirabaud and Cie (Europe) SA (new)August 2016
 China Merchants Bank Co Ltd (new)July 2016
 Bank of Communications Co Ltd (closed)July 2016
 Starling Bank Limited (new)July 2016
 BARCLAYS CAPITAL SECURITIES LIMITED (new)July 2016
 Bank Leumi (U.K.) P.L.C. (new)July 2016
 

Table 3. The most recently opened banks in United Kingdom.

All the credit institutions operating in United Kingdom can be classified into several categories. Table 4 summarises the number of banks in each category.

CategoryNumber of Banks
Banks187
Branches of foreign banks149
Building societies44
Central banks1
Savings banks2

Table 4. Number of banks by category in United Kingdom.

There are 149 branches of foreign banks from 38 different countries in United Kingdom. Table 5 shows 10 countries having the biggest number of branches in United Kingdom.

Country of OriginNumber of Branches
 Germany23
 France11
 United States8
 Netherlands7
 Luxembourg7
 Japan6
 Ireland6
 Canada6
 Italy6
 Spain6

Table 5. Number of branches of foreign banks in United Kingdom grouped by country of origin.