On the continuing robust health of UK banks...

Alice Cook looked at the gross figures for interest received and paid by UK banks, and reckoned that UK savers have been stiffed out of £350 billion since the 'credit crunch'.

However the bulk of those figures relate to payments from one bank to another - what's more interesting is to go back to the original figures she used from the Bank of England (Table B3.1 available here) and look at the column for 'Net interest receivable' (Column X), i.e. interest paid by UK borrowers minus interest paid to UK depositors.

The results are as we suspected - annualised net interest receivable was about £40 billion until Q3 2007 and since then has risen steadily to £60 billion. Or another way of looking at it is that bank's long-run typical net interest spread of about 2% has risen to about 3% (UK banks' consolidated financial assets/liabilties are in the order of £2,000 billion*).

This probably understates the loss to savers, as the extra £20 billion the banks are earning might, for example, represent annual savings to mortgage borrowers of £20 billion and a reduction in interest paid to savers of £40 billion.

* For sure, their unconsolidated/gross assets are something mad like £6,000 billion, but two-thirds of that is inter-bank stuff, a trick they like to play to make each individual institution look as if it were 'too big to fail'.