What Is a High Street Bank?
Let me explain what a high street bank is. It's a large retail bank with many branch locations, the kind you find in the main commercial areas of towns or cities. These banks provide everyday services like deposit accounts and credit facilities for consumers and businesses. We use the term to distinguish them from things like investment banks. It started in the United Kingdom, where 'high street' means the same as 'Main Street' in other places.
Understanding High Street Banks
As I mentioned, 'high street' comes from the UK and refers to the primary business street in cities and towns, much like Main Street in North America. Banks located there are called high street banks. These are major commercial institutions serving individuals and small- to mid-sized businesses. They handle deposits, withdrawals, consumer investments, savings options, and lending like overdrafts, loans, lines of credit, and mortgages. In the UK, big ones include Barclays, Royal Bank of Scotland Group (RBS), Lloyds Bank, and HSBC. They offer both in-branch and online banking.
Just like major banks in the US, these provide in-branch and online services. But they're under pressure from competition. Niche banks target specific markets or customers—for example, Zenith Bank connects to African financial markets with a UK presence. Challenger banks compete directly, often skipping physical branches for online-only models. This cuts costs, so they can offer higher savings rates and lower interest on debts. Take Atom Bank; it's app-based and provides savings and mortgages.
Additional Activities and Services
Some high street banks extend beyond retail. Barclays, for instance, also does investment banking, wealth management, and investment management. It serves about 48 million customers across personal, wealth, and business units in over 40 countries, listed primarily on the London Stock Exchange with a secondary on the New York Stock Exchange.
The Royal Bank of Scotland, part of NatWest Group and founded in 1727 in Edinburgh, offers services like savings, currency, fixed term, and notice accounts; cash management support; and loans for personal, auto, debt consolidation, home improvement, small business, mortgages, and agricultural needs. They also handle import/export, structured and asset finance, and invoice finance.
Lloyds Bank operates as a retail and commercial bank with branches in England and Wales. It's one of the Big Four clearing banks, founded in Birmingham in 1765. It grew by acquiring smaller institutions and merged with Trustee Savings Bank in 1995, trading as Lloyds TSB until 2013.
HSBC is another Big Four clearing bank, one of the world's largest, serving 39 million customers in 62 countries. It holds more deposits than loans, making it seen as less risky. It funded operations and kept its share price stable during the credit crunch.
Common Questions About High Street Banks
You might wonder, what's the best high street bank? It depends on the services you need. Reputable ones include Barclays, Royal Bank of Scotland, NatWest, Lloyds Bank, and HSBC.
Where does the name come from? These banks were historically on the 'high street,' the main commercial street in a city.
How many banks are in the UK? As of 2023, there are 365 businesses in the banking industry, up 3.5% from 2022.
The Bottom Line
In summary, 'high street bank' refers to traditional brick-and-mortar banks in the UK. These are large retail banks with hundreds of branches serving individuals and small businesses, not big firms. They offer the same as other commercial banks: deposits, withdrawals, investments, savings, loans, lines of credit, and mortgages. Reputed ones are Barclays, Royal Bank of Scotland, NatWest, Lloyds Bank, and HSBC.
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