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The Power of the Wave Principle

UK Safe Retail Banks List

Personal_Finance / UK Banking Jun 26, 2011 - 04:29 AM GMT

By: Nadeem_Walayat

Personal_Finance

Best Financial Markets Analysis ArticleThe following table lists Britain's major retail banking groups (separate licences) in terms of the percentage probability that your deposits above the UK compensation limit of £85k and Euro-zone banks 100,000 (current £/E £86k) would be secure in the event of a series of euro-zone debt defaults starting with Greece and that the crisis is contained to these smaller peripheral euro-zone countries i.e. Greece, Portugal and Ireland, if Spain comes under real risk of default then that would require a revaluation of this list as banks such as Santander would come under far greater pressure given exposure to Spanish government debt.


Banking Groups (separate Licences) Probability Deposits over £85k are Safe
National Savings & Investments
99%
Tesco Bank
80%
HSBC
75%
Co-op
75%
Standard Chartered
65%
Santander Group
50%
Barclays
35%
ING Direct
25%
Nationwide BS
20%
CitiGroup
20%
Lloyds TSB
10%
HBOS
10%
Nat West
5%
RBS
5%
Allied Irish
1%

 

The government backed National Savings tops the list at virtually 100% depositor safety ranking, as if NS&I goes bust so will have the the whole British financial system. Readers may be surprised to find out that Britain's safest commercial retail bank is owned and operated by the supermarket Tesco, next to follow are HSBC and Co-op, with Spain's Santander offering a 50/50 bet on the safety of deposits over £85k. The rest offer an increasing probability of loss of deposits that would take place amidst a sovereign debt crisis induced banking crisis. The government owned Northern Rock is probably 99% safe at this point in time but it is being primed to be sold off as are the share holdings of other high risk major retail banks such as RBS and the Lloyds group.

There are other smaller safe banks such as Yorkshire Bank which is owned by the National Australia Bank Group.

Depositors Protect Yourselves From Potential Banking System Crisis

UK bank depositors need to prepare for the worst case scenario in what may follow a Greece debt default and contagion snowballing across Europe's financial system, especially as you are receiving a pittance in interest on even the best deposit accounts of less than 2.5% after tax which does not match the risks of loss of funds in excess of £85k. UK bank account holders have been receiving mail shots from their banks over the past 6 months informing them of the protection of their deposits upto a value of £85,000 per individual customers across the banking group. This should not be treated as junk mail but rather banks laying the ground work for the real risk of defaulting on deposits over compensation limits as a consequence of the bankruptcy of peripheral Euro-zone countries starting with Greece. Remember Greece going bankrupt is not a question of IF but rather when.

Therefore savers with amounts deposited above the guaranteed limit need to ensure that they have measures in place well ahead of a banking crisis to ensure that they survive one both in terms of the ability to transact business as well as ensuring total funds exposed are LESS than the £85k banking limits at the time of a bank run.

Scare Mongering ?

Am I scare mongering? Try asking those that were locked out of their savings accounts when the Icelandic banks went bust during October 2008. The banks froze UK customers out of their accounts on the 7th of October 2008. My analysis of 2nd October 2008 had warned that small countries such as Iceland were at risk of going bankrupt, with Iceland's bankruptcy preceded by some 24 hours earlier by Iceland Going Bankrupt?, - "savers should at the first opportunity seek to repatriate their savings to a 100% UK bank as the consequences of a country going bankrupt could render guarantees meaningless".

Sign up to my always free newsletter for detailed immediate steps to take to protect your savings (due to start going out later today).

Source and Comments: http://www.marketoracle.co.uk/Article28905.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2011 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of three ebook's - The Inflation Mega-Trend; The Interest Rate Mega-Trend and The Stocks Stealth Bull Market Update 2011 that can be downloaded for Free.

Stocks Stealth Bull Market Ebook DownloadThe Interest Rate Mega-Trend Ebook DownloadThe Inflation Mega-Trend Ebook Download

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Simon Green
28 Jun 11, 09:12
UK safe banks

Hi Nadeem

Not recieved the steps to protect savings newsletter or seen anything posted yet ?

Simon


Nadeem_Walayat
28 Jun 11, 15:37
protect your savings

Hi

The article / newsletter is 90% complete, will start going out this evening.

Best

NW


Diane
07 Jul 11, 04:19
Post Office Savings

Hello Nadeem,

Thank you again for the quality of the work you provide us.

My I please ask the safety of Post Office Savings now, which I understand is separate from National Savings and Investments. I know it is administered by Bank of Ireland, but it has been placed under a UK subsidiary, and is under the FSA Compensation Scheme now. However I would be interested to know how safe it is.

All best wishes,

Diane :)


Nadeem_Walayat
08 Jul 11, 02:49
Post Office

Hi

Yes the Post Office is safe upto £85k.

But depositors need to be on guard against being suckered into structured products that the Banks will be pushign them to take on, which do NOT fall under the compensation scheme.

i.e.

Santander Guaranteed Capital Plus Accounts


DRS
29 Jan 12, 14:28
Thankyou Nadeem

Thankyou Nadeem - once again you posted very helpful material regarding safe banks.

Don't agree with you about inflation though - I think deflation is coming.

Also, sorry to hear about the passing of your father (Read about it on your blog page)

Regards.


Asif Vasaya
18 May 12, 05:20
Need Guidance

Hi Nadeem,

Myself Asif Vasaya, these days I am reading your views on the coming euro financial crisis and I am also reading books on the upcoming dollar crisis. I am living in London. I am a very common person and earn about £1000 per month and live hand to mouth. Nadeem I wanted guidance from you with respect to measures I must take to withstand the coming financial crisis. I have just got very less savings. Please provide me with some directions.I also wanted to know how this dollar crisis will affect India.

I am waiting for your reply Nadeem.

Kind regards,

Asif


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