High street banks are being urged not to scavenge business from their beleaguered rival Northern Rock for the “sake of the industry”.
Anthony Thompson, chief executive of the Financial Services Forum, warns that Northern Rock’s situation affects the whole industry and has pleaded for institutions to act together to ensure any “crisis of confidence is resolved”.
His comments come as a number of high street banks, including Barclays, have launched targeted campaigns to pick off disaffected Northern Rock customers. The Barclays campaign has the strapline “A great home for your savings”.
It is also understood that branch staff from a number of banking brands have been targeting customers queuing up to withdraw their savings with leaflets and business cards in an attempt to win their business.
Meanwhile, the crisis has led the Financial Services Authority (FSA) to state it is “confident” that Northern Rock will remain solvent and its chairman Sir Callum McCarthy has criticised “irrational” savers for continuing to queue.
Thompson says banks should dissuade branch staff from snaring customers from queues saying that, although short-term gains may be made, banks’ unscrupulous behaviour would cost their brand equity.
Thompson adds: “It serves no purpose in the long run, regardless of any gains in the short term.”
An insider at one bank says the behaviour of some companies gives the financial services industry a bad name. He says: “All this ambulance-chasing further leads to consumers believing that we act in our own best interests, not theirs.”
Northern Rock is expected to hold a board meeting today (Wednesday). It follows suggestions that the Government wants the bank’s top executives axed.
Northern Rock chief executive Adam Applegarth has apologised to consumers in an open letter in several national newspapers on Tuesday. However, some newspapers also carried an ad that continued to promote the bank’s unsecured loan product.