High street bank that needs to get the balance right

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Spanish bank Santander is now a major presence on our high streets and in the banking community, having acquired Abbey, Alliance & Leicester and Bradford & Bingley.

It is the UK’s fifth largest lender but for the third quarter reported a 27 per cent profit fall to £372m.

It has set aside a massive £731m to compensate victims of payment protection insurance mis-selling.

Its planned stock market listing has been shelved.

Santander was due to finalise taking on nearly two million clients from the Royal Bank of Scotland through 316 branches but walked away from the deal in November, citing computer glitches.

It urgently needs to sort out its terminology and hire IT specialists who speak the same language as the clients.

Like most banks, its online section has two headings of ‘current balance’ and ‘available balance’.

The latter is a quite incorrect term. It is a rag-bag of money composed of cleared funds, uncleared deposits (such as cheques awaiting the required number of days for processing) and any overdraft facility.

It is misleading to call this ‘available’. If any client did not know and took Santander at its word and used such money, charges would immediately kick in.

The overdraft which is built in is not shown in the same section. It is not one agreed with the client but offered by Santander.

The sum needs to be memorised, both to deduct from the ‘available balance’ to determine the true amount belonging to the client and to answer when challenged for security if a query arises.

It would, of course, make sense to show this figure alongside but such a helpful and obvious piece of information is withheld by the bank.

Amazingly, for a bank with a bad reputation for complaints, it has sought to take on yet more current accounts.

Perhaps a phase of no product launches would be good, concentrating instead on improving its systems and ensuring existing terms are correct.