Banks make £500m extra in UK

British high-street banks have been accused of taking advantage of their customers after it was revealed that five of the biggest had made £500m extra profit in six months in the UK, despite incurring massive losses with bad investments elsewhere in the world. Figures from five retail banks show that HSBC, Lloyds TSB, Royal Bank of Scotland, Barclays and HBOS made combined profits of £4.294bn in the first half of 2008, compared to £3.808bn for the same period in 2007.

The banks increased the rates they charge customers for products such as credit cards and mortgages, looking to recoup the losses they made on investments as a result of the global credit crisis, triggered by the collapse of the US subprime mortgage market.

Melanie Bien, a prominent mortgage broker, said: "Banks freely admit that they are chasing margin rather than market share since the credit crunch hit, which is making mainstream mortgages profitable again."