Lloyds Banking Group Plc’s Halifax unit gained the most customers from its rivals of any U.K. lender in the third quarter as probes by the competition watchdog and financial incentives resulted in more Britons switching banks.
Royal Bank of Scotland Group Plc and Barclays Plc lost the most U.K. checking accounts in the period, the most recent data published by Britain’s Payments Council on Thursday show.
The Competition and Markets Authority began probing checking accounts and small-business lending in November after it said British banks haven’t done enough to open up the market. Halifax, the ‘H’ in the former HBOS Plc, which was bought by Lloyds in 2009, offers 125 pounds ($188) to open an account and won a net 53,624 customers in the quarter.
“Halifax is being set up as Lloyds’s internal challenger bank,” said Gary Greenwood, an analyst at Shore Capital Group Ltd. in Liverpool, England. “With the CMA review, they want to show they have a competitive offering so there’s no need to break them up.”
RBS and its NatWest unit recorded a net loss of 31,377 customers between them in the three months through September 30, the data show. Barclays lost a net 31,331 customers.
“Why do people move? They’re either so disenfranchised that they want to go somewhere else, but it’s more likely because there’s an offer on,” Greenwood said. “You tend to attract low quality deposits with offers, so as soon as someone else pops up with another deal they move there.”
In the 12 months through March 31, about 1.14 million consumers changed checking accounts, known as current accounts in the U.K., using a service overseen by the Payments Council guaranteeing the transfer of services within seven days. That’s a 7 percent increase on customers who switched in the year-earlier period.
An RBS spokeswoman said the bank has cut the time it takes to open an account and simplified its product range, and is planning more measures to retain customers.
Barclays said its overall customer numbers are growing, with twice as many new accounts as those being closed, and that it started a “Blue Rewards” program this week that pays some of its customers to hold accounts.
Halifax’s gains are “evidence of the extra value we deliver to our customers,” Nick Young, head of current accounts at the division, said in an e-mailed statement.