The UK banks have performed well in this year. This is due to the relative strength of the economy, and also higher interest rates. These factors have helped their net interest incomes (NIIs) reach their highest levels for years.
Lloyds Bank shares (LLOY), which were at their lowest level in 2023, have now risen by more than 55% and hover near the highest levels they’ve seen in many years.
Barclays’ (BARC), which rose from a low of 138p last August to 238p this month, was over 95% higher than the previous year. NatWest’s (NWG), on the other hand, grew by more than 133% during that same time period.
Lloyds has over 26,000,000 customers in its UK subsidiaries including Halifax, Bank of Scotland and Scottish Widows.
NatWest boasts over 20,000,000 customers under its leading brands, including Royal Bank of Scotland (RBS) and Coutts.
These are large corporations with combined market caps of more than $46 billion (Lloyds, $1.1 trillion, and NatWest, $36 billion). Barclays’ assets total over $1.6 trillion while Lloyds, NatWest and NatWest each have more than $1.1 trillion.
Lloyds Bank, NatWest and Barclays
Revolut
Revolut is a fintech startup that launched in 2015 and has continued to grow.
Revolut has made it easier for people to manage their finances and make payments, particularly the younger generation. The users can easily open an account, deposit money into their savings, buy cryptocurrencies and make payments.
Revolut has the advantage of a “freemium” model. This means that people can start using it without having to pay any money. Premium accounts begin at PS3.99 per month and the most expensive account costs PS45.
The most expensive cards come with a Platinum card and include free ATM withdrawals as well as unlimited access to airport lounges, insurance for car rental, higher interest rates on savings, plus a complimentary platinum card. Subscriptions are a great way to generate revenue.
Revolut has grown
Revolut’s growth has reached a new record, bringing its customer base to more than 45 million.
The company’s growth is a result of the large sums it has raised. The company raised $10 million for its initial round, followed by $250 million the following year and $500 million next year. It then raised $80 million 2020.
This fundraising has made it an extremely valuable brand. The most recent transaction valued it at more than $45 billion. It is now bigger than Lloyds Barclays and NatWest.
Revolut continued to do well, as shown by the most recent financial reports.
Profits before taxes rose from $545 to $545 millions, making this a very profitable business. The company’s net profit margin is 19%, while its number of customers has increased by 12 millions and customer balances have reached $23 billion.
Lloyds reported a total revenue of over PS19.2 Billion and a profit of over PS7 Billion. NatWest had a total revenue of PS14.2 billion, and profit of more than PS4 billion. Barclays’s was over PS30.2 billion.
Revolut is confident that the company will continue to grow, particularly now that they have received their banking licenses in United Kingdom. The European Central Bank has now taken over the supervision of Revolut. It has a banking license that allows it to provide more services. Plans to begin mortgage lending in Britain in 2023 are part of the licensing.
Revolut, once it has received its full banking licence, will offer overdrafts and loans to more than 9 million UK customers.
Banks that are traditional
Revolut’s rapid growth is causing concern about how it will impact existing banks such as Barclays, NatWest and Lloyds. The company will also be expected to provide its services at a more affordable price than the big banks. It also has fewer branches than other large firms in the country. This helps to reduce costs.
Revolut has a similar impact in many other countries. Nu Holdings is a good example. It has grown to be the largest bank in Latin America based on market capital. The bank is the second largest in Brazil after Petrobras.
The number of Nu customers has grown to millions from Brazil, Mexico and Colombia. It also passed large regional banks like Itau Unibanco Banco do Brasil and Banco Bradesco when it comes to market capital.
These banks also continue to do well, despite Nubank’s popularity. Itau Unibanco, for example, has seen its stock rise by 67% since 2023.
Revolut, therefore, will be able to coexist with the other British banks on a long-term basis. Most of Revolut’s customers do their business with traditional banks like Lloyds or NatWest.
Revolut is a threat to Lloyds Banks, NatWest and Barclays. This post may change as new information unfolds
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