10 years on: Triodos MD calls for a radical overhaul of the UK banking system

New research reveals public perceptions of banking 10 years on from financial crash 

On the tenth anniversary of the collapse of Lehman Brothers, the head ofthe UK branch of Triodos, Europe’s leading sustainable bank, has called for a radical overhaul of the country’s banking system.

Bevis Watts, Managing Director of Triodos Bank UK, commented: “The pace of change has been far too slow and more needs to be done to re-purpose banking for good, through greater transparency on how money is used, carbon disclosure, impact reporting and using risk capital weightings to account for environmental and societal risks.”

According to new research[i]commissioned by Triodos Bank, two thirds (60%) of British people don’t think enough has changed since 2008, with the same proportion concerned about what the next 10 years holds for the sector and its impact on the economy.

Trust is low, with only a quarter of people trusting the banks more now than they did in 2008, when UK banks were bailed out to the tune of £400 billion[ii].

While some of those banks have yet to return to profitability, and many of the new fintechs and challenger banks are yet to demonstrate a profitable and sustainable business model, Triodos Bank NV has continued to provide a stable return to investors and growth every year for the last decade.

The bank saw total assets under management growth of 30% in the year immediately after the financial crisis and has continued to see consistently strong growth since.

return on equity

The balance sheet has grown 4.3 times bigger in the 10 years from 2008-2018 and the tier 1 ratio is currently more than 18%, an important indicator of a bank’s strength.

Watts added: “A deep sense of distrust remains at the heart of the relationship the general public and small businesses have with banks. While there have been some welcome changes to better regulate banks, we have still not fundamentally addressed the role they should be playing, in terms of the social value they create and serving the long-term interest of their customersWe also still need to address banks being too big to fail and deep-rooted issues that were at the heart of the financial crisis such the excessive bonus culture.

Triodos Bank, which has 700,000 customers across Europe and has been operating in the UK for over 23 years, only lends money to organisations and projects in the real economy that are making a positive difference to society and publishes details of every single loan it makes:www.knowwhereyourmoneygoes.co.uk.

Watts continued: “Ultimately, we get the banks we deserve, and people can have a huge influence on what banks do with their money and how they behave by the choice they make in who they bank with. Current account switching rates in the UK remain incredibly low despite the 2008 crisis and the wave of scandals revealed since.”

Triodos has asked its customers to take to social media on 15 September to mark the #10YearsOn moment and spread the word about sustainable banking.

Karn Shah, aged 29, a Triodos Bank customer from Bristol, says: “The current banking sector feels completely disconnected from reality. The global financial crash a decade ago destroyed the livelihoods of hundreds of thousands of people, yet there has been no real change in the way large banks operate. My wife and I want our money to be invested ethically and to support innovative businesses, so I did some research and found Triodos offered a unique type of ethical banking, one that screens positively and rules out the risk of investing in arms or fossil fuels.”

Watts concluded: “This anniversary is an opportune moment to pause, reflect and take stock on whether our current banking system is serving the needs of society and helping to create a fair and sustainable future for all of us.

Money is a powerful form of democracy and we all have a choice to take action and shape the world we want to live in by switching to a sustainable bank.” 

[i]A nationally representative sample of 2,020 UK adults (aged 18+) were surveyed by Opinium Research on behalf of Triodos Bank between 2-8 August 2018.

[ii]Rescue plan for UK banks unveiled, 8 October 2008: http://news.bbc.co.uk/2/hi/business/7658277.stm