British banking has been highly consolidated since the early 20th century. Unlike some other major economies, the UK does not have a major stratum of independent local banks. The number of independent banks shrank further during 2008: Northern Rock was nationalised by the UK Government (and is now owned by Virgin Money), followed by Bradford & Bingley; Alliance & Leicester was acquired by Santander, who merged it into Santander UK. On 18 September 2008, Lloyds TSB plc entered into a confirmed agreement to take over HBOS plc (HBOS plc included Halifax Bank and The Bank of Scotland), which took effect on 19 January 2009, when HBOS was acquired and folded into Lloyds Banking Group.[1][2][3]
The retail and commercial banking markets are dominated by HSBC, Barclays, Lloyds Banking Group and NatWest Group in addition to Spanish-owned Santander UK which some people[who?] argue should be apart of the "Big 4" making it the big 5, however its Spanish origins hinder its credibility as a British bank despite its ability to act autonomously and independently from the Spanish bank itself as it is "managed by its own local team and is responsible solely for its performance away from its Spanish owners"[citation needed] (most of these companies operate more than one banking brand in the UK). As well as this, the Nationwide Building Society (commonly referred to as "Nationwide"), and Standard Chartered both make compelling arguments to be the fifth and sixth members of the elite group with both banks even surpassing one or two of the "Big 4" Banks in some areas of performance.[original research?][citation needed] In addition to this the Bank of England is also an extremely high performer in global banking but its private and state-run status keeps it out of the "Big 4" as the group is solely reserved for private companies,[citation needed] all of which are listed on the London Stock Exchange as of 2024.
The largest of the "Big 4" banks in every relevant metric is HSBC Holding (the HongKong and Shanghai Banking Corporation) which, despite its name, is a British universal bank and financial services group headquartered in London, with historical links to business in East Asia. It is the largest bank in Europe and the 7th largest in the world by total AUM (assets under management) and 9th largest in the world by market cap.[citation needed]
^Includes NatWest, the Royal Bank of Scotland and Ulster Bank. The UK government owns a stake of 10.9% of NatWest Group's ordinary shares,[6] but the bank remains nominally independent of government[7]
Retail banks
These banks provide retail services to the general public. Retail banks are usually known as High street banks as they traditionally had multiple branch locations in the cities and towns across the UK. However 40% of branches closed between 2012 and 2022 .[8] Four British retail banks have never had a physical branch presence.
The retail and commercial banking markets are dominated by five big banks. HSBC, Barclays, Lloyds Banking Group, NatWest Group and Spanish-owned Santander UK who operate more than one banking brand in the UK.
Tesco Bank, which was acquired by Barclays on 1 November 2024 from Tesco.[17]
Harrods Bank, which was acquired by Tandem Money Limited on 11 January 2018.[18]
Building societies in the UK
The other main class of consumer financial service organisation in the United Kingdom is the building society. The building society sector has become much smaller with fewer building societies. This was caused, firstly, a number of building societies demutualising in the 1980s and 1990s and subsequently, taken over by banks. Secondly, there has been ongoing consolidation via mergers between societies.
There are 42 building societies in the UK as of 2021 which provide retail banking services to the general public. The five largest as of October 2020 are:
A full list of businesses considered banks by the Prudential Regulation Authority are listed in the table below. The list is based on the definition of 'bank' in the glossary of the PRA Handbook.[20]
Name of bank
Parent company
Location of headquarters (Parent where applicable)
^Includes NatWest, the Royal Bank of Scotland and Ulster Bank. The UK government owns a stake of 22.5% of NatWest Group's ordinary shares,[12] but the bank remains nominally independent of government[13]
