Government Owned Banks Not Helping Loan Market
In the aftermath of the recent banking crisis in the UK, several of the major high street banks in the country had to be bailed out with help for the Government in the form of Treasury loans, in order to keep them afloat and not breach liquidity rules.
One of the main criteria of being granted these government loans was that the banks should be at the forefront of leading Britain out of recession by offering competitively priced cheap loans to customers who need them, in order to provide a boost and help get the economy going again.
But new research from Moneyfacts.co.uk has found that many of these state owned banks are actually charging a higher rate on their loan products than many of their privately owned competitors and some people have accused them of charging higher loan rates to their customers in order that they may repay their own loan debts back to the Government.
The exception to this rule is the Royal Bank of Scotland, who is currently offering one of the most competitively priced ranges of home owner loan deals on the market, with an average rate of 3.84 per cent. However, home owner loan interest rates from Cheltenham and Gloucester, the Halifax and Northern Rock are all well above the average rate for the rest of the loan market place.
Michelle Slade of Moneyfacts.co.uk said “Many hoped that the state owned banks would be at the front of the queue for unlocking the mortgage market, but this isn’t the case. Some state funded banks appear to place a higher priority on getting out of Government ownership, rather than helping with competitive rates the customers who supported them.”
