Big, ugly banks
Posted on February 21, 2007 by Wynona
Filed Under User Postings, Ramblings |
[Editor’s note: Wynona is a guest blogger and industry insider I’ve recruited to give our blog some bite. Go on, give her some stick, she deserves it.]
Despite the fawning, two-dimensional praise lavished by too many City journalists on yesterday’s results announcement, big is NOT beautiful – not at all. Unless you are on the executive of Barclays, or one of their larger shareholders that is.
That weird period early in every New Year, when Britain’s beloved banks tell us how much they ‘earned’ last year is with us again. And what a grand dichotomy it always turns out to be. Bankers wanting to tell us they are - as Pink Floyd once sang - so happy they can hardly count, but on the other hand desperate to feign humility and tell us how their profits are somehow just, even ethical – and stretching the point until it must surely snap – “in the wider interest”.
Yeah, and Hitler was misunderstood…
UK banks profits are truly awesome. Equivalent to the GDP of many smaller countries or the amount needed to resurrect ALL of our ailing public services in one huge go. Good grief, less than 1% of Barclays profits last year would even put the Labour Party’s books back in the black (knighthoods anyone?).
Even when they have a bad year, other industries look on enviously at returns on capital in the UK Banking sector and think “Ah, how the other half lives”.
So in 2006, Barclays made more than £7 billion profit. That was a 35% increase on the year before. If you are a Barclays customer, how do you feel? Amazed that they could make THAT much money AND provide the wonderful value and service that they did for you?
No, I didn’t think so.
The guy on the Radio 4 Today programme (was he the PR man or the CEO, it’s so hard to tell the difference these days?), did his best to prove how confident Barclays is that what they are doing is somehow ‘good for everyone’ by raising the issue of the questionable ethics of profits of this size before even John Humphries had fired his trusty chainsaw for his customary attack.
Big mistake (fire the PR agency – right now).
So Barclays £7 billion ‘pound of flesh’ is good for us because it means their pension fund deficit will be reduced.
Sorry?! Why should Barclays’ customers subsidise Barclays’ employees pension funds – especially when most of the money will go to the morbidly Fat Cats at the top of their pyramid – when they can barely afford their own?
Err, no. What I meant to say was that bigger profits means Barclays pays more tax, which pays for more hospitals and schools…
Well, actually, no. If the money was left in people’s pockets chances are they’d pay more or at least just as much tax when they spent it on something that at least gives them something back of value.
Right – okay then. What about all our charitable and community activities? Earning these kinds of profits means we have more to spend on that kind of “right on”, Bill Gates sort of stuff?
Hmmm. I wonder what percentage of last year’s £7 billion profit you spent on that? 0.0000001%? was it. And what about the tax breaks you got for doing so? Didn’t that remove a hospital, school or two?
In the final desperate lunge for some credibility, Barclays jumps to the more than £2 billion that they wrote off in bad debt in the UK lending market – like it was some badge of honour.
Puke! What a truly outrageous piece of would-be PR spin that is…
While Barclays’ profits quietly absorbed more than £2 billion of bad debt, leaving £7 billion in their pockets, I wonder how the thousands (if not millions) of people – real people – who have had their lives totally screwed by getting into irreversible debt feel?
That £2 billion that Barclay’s quietly confesses to represents a shameful slice out of the financial well-being of this country. People’s lives in financial tatters. Left to become fodder for some awful Carol Vorderman advert on daytime TV.
Truth is – in the world of banking in this country – Big is Ugly. Very, very ugly.
Shame on Barclays. And shame on the rest of the Big Bad Bankers who will be reporting soon. You are all crooks in my book. In fact most crooks don’t get to rob us blind like you do – not without spending a long, long time in jail.
Wynona.
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5 Responses to “Big, ugly banks”
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I have no quarrel with banks. I have a free current account (not Barclays) and a savings account which pays a good rate of interest. Whenever I want to move money or pay bills, I can do it in seconds online.
As an investment, banks usually provide capital gains (not HSBC) and some of the best dividends. They are relatively safe as they can’t help making profits.
My only dealings with Barclays are buying some ETFs which I consider to be good value.
So what’s the problem?>
Why do we always knock success? First Tesco, now the Big 4, Barclays being the latest. If customers are silly enough to use uncompetitive products, e.g. loans, overdrafts, that’s their own fault. It also has to be said that a large part of the profits is from investment banking, not personal banking.
Am I the only one who thinks that, if people breach their overdraft limit, they know the penalty when opening their account, i.e. they should pay up and shut up?
Why not profit from their success and buy some banking shares? You could then attend the AGM and give them some feedback about services!
I personally used to bank with Barclays who provided an OK service but eventually moved to another provider to get decent interest and online facilities with my current account. In their favour, I believe they have just reaffirmed their committment to Free banking, unlike Nationwide who seem to want to charge for it.
So much for mutuality!
As for fees, I have nothing directly against them as long as I am no worse off, financially. If they want to charge me per transaction, then fine. I, in return want interest on anything credited to my account on day 1, at a rate not less than the Bank of England base rate!
I think if the banks must reveal thier profits to Joe Public every year , they should also at least give an idea of a brakdown of how all that excessive wealth is distributed. Of course there are those employees who have worked very hard and deserve to be rewarded but I think this country is in desperate need of a moral and ethical introvenus topped with a thick crust of financial aid, why rub our noses in it, so they made a shit load and meanwhile the rest of us still struggle our lazy asses into dead end, underpaid, highly taxed jobs each day…. Rich people are rich because thay dont spend it.. poor people can’t afford not to spend it … There must be a way to bridge the gap.. but the trouble is the government, what ever party it is, HAS to maintain the gap or what would they have to do otherwise ????
If banks want to establish any form of credibility they should become philanthropic like Carneggie, Gates, Buffet, Tom Hunter and start plowing part of their profit back into “smart” sustainable projects that raise the bar for the majority of people who live in this country.
Only by ensuring a stable and fair society do you build stability and security into a country’s long-term development.
We badly need the business acumen that makes the banking industry huge profits to turn its hand to creating a better society in the UK.
If we don’t, there will come a time when people will say enough and will push to have the money taken off these companies through profits taxation at exorbitant rates.
Again, why do we knock success. As a company Barclays has had a successful year, and everyone seems to think this is all from high overdraft charges and referral fees. You will find that these only make up a very small proportion of that immense profit. People seem to forget that it is a global business dealing with Businesses as well. The profit is also makeup of Barclays Capital, Barclays Global Investors, UK Retail Banking, UK Business Banking, Absa, GRCB Western Europe, GRCB Emerging Markets and Barclays Wealth.
All of these play a part in making up that £7bn.
The expense too has been huge, Barclays have been the first Large company in the UK to become Carbon Neutral, how many of the other big companies have taken up such a task.
Would Wynona bear such a grudge if her company was successful?