Q3 earnings calls at major UK banks were dominated by deposit competition rather
than bank tax, rate moves, inflation or AI, UBS analyst Jason Napier said on
Lloyds Banking Group's results call, calling deposits "investors' primary
concern." Lloyds reported a £300m decline in UK retail savings deposits in the
three months to Sept. 30. NatWest Group said private bank and wealth-management
deposits fell by a similar amount. Barclays reported a £2bn q/q drop in UK
corporate banking deposits. HSBC said a key profitability metric remained stable
but that new competition for customer deposits in the UK and other markets has
offset some positives. Deposits are a cheaper funding source than wholesale
markets; smaller deposit bases increase the risk banks must cut lending or take
on higher funding costs.
