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Other UK Banks

Bradford & Bingley

Bradford & Bingley was part nationalised by the British Government on the 29 September after the bank's profits were hit by the credit crunch. The bank's £20 billion (2.7 million customers) savings business, which includes its network of 200 UK branches, was bought by Banco Santander-owned Abbey.

Bradford & Bingley remains open for business as usual, with the senior management team and the Bradford & Bingley brand also intact. Earlier this month, the bank's customers were assured by the government that their deposits were "absolutely safe and secure", with the Financial Services Compensation Scheme (FSCS) increasing the limit of protection on deposits from £35,000 to £50,000.

However, B&B now operates on the same banking licence as Abbey (and its internet bank Cahoot) meaning they are all considered as one FSA registered institution. As a result, only one lot of £50,000 protection applies for B&B customers that also have savings with Abbey (or Cahoot).

Lloyds TSB & HBOS

Lloyds TSB is currently the fifth-largest banking group in the UK, operating in England and Wales as Lloyds TSB, and in Scotland as Lloyds TSB Scotland plc. Its subsidiaries include the mortgage bank Cheltenham and Gloucester, life assurance company Scottish Widows and its Black Horse finance house.

HBOS (Halifax Bank of Scotland) was formed by the 2001 merger of Halifax plc and the Governor and Company of the Bank of Scotland. Since its introduction as a fifth major player in the UK banking sector, HBOS has rapidly grown in stature and is now the UK's largest savings institution and mortgage lender.

Takeover

In September 2008, Lloyds TSB announced it had agreed a £12 billion rescue takeover of HBOS after the British Government brokered a deal to save the mortgage giant from the financial markets crisis.

The Government said the move was necessary to shore up confidence in HBOS after the rising cost of wholesale funding and a sharp share price fall raised concerns that the bank would not be able to fund itself.

In order to avoid a repeat of the Northern Rock fiasco, the Government announced that it will allow the merger to bypass competition rules, which state that a company cannot hold more than 25% share of the mortgage market (Lloyds TSB will hold a 28% share of the market once the takeover has been completed).

It was revealed that the Financial Services Authority contacted a number of other banks, including HSBC, but only Lloyds was willing to take on HBOS without a large government guarantee.

Savings Security

This big takeover deal's is not expected to be completed until the end of 2008 or early next year, so for now the two banks remain as separate institutions. This means that savers with deposits in both are covered up to £50,000 in each. However, the constituent parts of HBOS (Halifax, Intelligent Finance, The AA and more) only count as one institution, so savers who hold multiple accounts with these companies are entitled to just £50,000 cover.

In a company statement, Lloyds TSB reassured customers not to worry about their savings as "deposits with both companies continues separately under the Financial Services Compensation Scheme and will do so until the deal is finalised".

* On 13 October, 2008, Prime Minister Gordon Brown announced that the Treasury would inject £37 billion of taxpayer's money into Lloyds TSB, HBOS and the Royal Bank of Scotland, to avert a collapse of the financial sector. In exchange, the Government would hold a 40% stake in HBOS, and 60% in RBS.

RBS

The Royal Bank of Scotland plc is one of the retail banking subsidiaries of the Royal Bank of Scotland Group plc, along with commerical banks NatWest and Ulster Bank.

RBS operates around 700 branches in the UK, most of which are based in Scotland. The bank and its parent company, the Royal Bank of Scotland Group, are completely separate from fellow Edinburgh based bank, the Bank of Scotland, which is licensed by HBOS.

Savings deposits held in RBS are guaranteed up to £50,000 under the Financial Services Compensation Scheme (FSCS).

It is also important to note that savers who hold multiple accounts with RBS and covered under the FSCS (up to £50,000) for each, as both banks are owned by the Royal Bank of Scotland Group.

Barclays

Barclays is the UK's third largest bank based on market capitalisation and also ranks as the fourth largest financial services provider in the world.

Despite the current downturn in the global financial markets, the bank has confirmed it will not call on Government funding to improve its Tier 1 capital - an agreement whereby UK banks pledged to increase their capital positions by a combined £25 billion as part of the Government's £500 billion bank rescue package.

Instead, the banks said it will go it alone by raising over £6.5 billion from private investors to help shore up its balance sheet.

The bank has sought to distance itself from rivals such as Royal Bank of Scotland and HBOS, which are to receive a £37 billion cash injection from the Government, by claiming it is "well capitalised, profitable and has access to the liquidity required to support its business".

The decision not to accept the government's offer of support means that Barclays will not be limited by any of the pay or risk guidelines facing its rivals.

Barclays savings customers are covered by the Financial Services Compensation Scheme, meaning deposits held in the bank are guaranteed up to £50,000.