Barclays discovers the value of its depositors

Outlook Speaking of the cost of doing business, Barclays has announced that it will pay £7 a month to its loyal current account customers from next week. It’s quite a U-turn. Not long ago both Barclays’ chief executive, Antony Jenkins, and its chairman, Sir David Walker, were mooting imposing charges on current accounts.

It’s a bizarre concept: you lend cheap money to a bank and the bank wants to charge you for the privilege? Yes, there are costs from staffing branches and sending out chequebooks – but that money, when lent on by the bank, still ought to generate a profit. If the bank really can’t cover its costs from the interest rate spread it shouldn’t be in business. Only on Planet Bank Executive could imposing current account charges have ever seemed like a reasonable idea.

Barclay’s volte-face has apparently been spurred by the fact that it’s been haemorrhaging customers since the new seven-day current account switching infrastructure was put in place. All of a sudden those cheap deposits do seem worth having after all. Funny that. A cynic would say that this was a bank that previously took its current account depositors for granted.