The chair of digital bank Atom has slammed Britain’s banking giants for failing to drive the country’s economic ambitions.
Lee Rochford, who had tenures at Virgin Money, RBS and BNP before Atom, said it was “increasingly unclear what role [top banks] are playing in driving better customer outcomes or supporting UK economic growth”.
Chancellor Rachel Reeves has turned to the bosses of Britain’s biggest lenders over the last year in the fallout of the US’ tariff onslaught and in hopes to boost her ailing growth agenda.
The fintech chair did not name specific firms but said “Tier 1 banks” had offered “paltry saving rates and barely increased lending” despite a backdrop of soaring profits and booming market shares.
The Bank of England’s Financial Policy Committee lists HSBC, Natwest, Lloyds, Barclays, Santander and Nationwide – often dubbed the ‘Big Six’ lenders – as among those too “systematically important” to fail otherwise known as “Tier 1”. FTSE 100 giant Standard Chartered is also a part of this group.
Big banks ramp up market dominance
The Big Six have ramped up their market share in recent years as takeovers grip the City’s banking landscape.
These have included Nationwide’s blockbuster £2.9bn takeover of Virgin Money, which catapulted it to the country’s second largest provider of mortgages and savings accounts, and Barclays’ £600m swoop for Tesco Bank.
Natwest has also snapped up the majority of Sainsbury’s lending assets and purchased Metro Bank’s £2.5bn residential mortgages portfolio in 2024.
But Rochford said the acquisitions “further entrench the dominance of high street brands and raise questions about the enduring competitiveness and appeal of sub-scale universal banks”.
Atom counts building societies such as Nationwide and Coventry – which acquired the Co-operative Bank last year – as its key competitors.
The firm caters its lending to homeowners and businesses with its retail deposits and lending focusing specifically in residential mortgages for small- and medium-sized enterprises.
Atom was among a fleet of businesses that City AM revealed were weighing joining the new Pisces private stock market earlier this year.
Elsewhere, the fintech’s profit slipped to £5m, from £7m the year prior. The digital bank’s net interest margin – a key indicator of a firm’s profitability from lending – shrank to 2.2 per cent from 2.8 per cent.