We often hear that the low interest rate environment has made profitability particularly challenging for the banks - and for challenger banks in particular. The introduction of negative interest rates feels like it could be even more challenging
This is just the Bank making sure that is has the flexibility to go negative if it wants - it’s not forward guidance.
I suppose negative rates would be difficult for anyone generating revenue from interest held at the central bank. The bigger problem with challengers is the path to profitability - the stats from Monzo paid accounts are looking good, so hopefully they are on the right track and that the cost of interest doesn’t wipe that out.
More broadly, I think I’ve heard the big banks say that negative interest rates might kill free banking. That might actually be a bonus for the neobanks as they can operate accounts for single digit £s a month, whereas the others have bigger overheads. If Monzling have to compete on price, then I think they will do very well…
2 Likes
sounds like a cute bird
2 Likes
The murmurations are in hot coral.
3 Likes
This topic was automatically closed 180 days after the last reply. New replies are no longer allowed.