UK public confidence in banks slowly recovering

Public confidence in banks in the UK has been steadily recovering over the last six years after hitting rock bottom in the aftermath of the 2008-9 global financial crisis, according to Gallup’s annual survey of public confidence in financial institutions.

The polling company has surveyed about 1000 people in the UK every year since 2006 asking whether they have confidence in their banks.

Public confidence collapsed following the subprime crisis and government bailouts of leading lenders, tumbling from 64% approval rating in 2006 to 27% approval (72% disapproval) in 2012 amid the European debt crisis and the scandal over mis-sold payment protection insurance (PPI).

However, since 2012 banks’ approval rating has been steadily climbing year-on-year and reached 56% approval this year.

“Ironically, it’s the current crisis, Covid-19, that is probably behind the upward leap,” said Jeremie Brecheisen, a partner at Gallup Europe.

“Mortgage holidays, small business loans, and support for wages through the furlough scheme have been gratefully received by the public, offering breathing space in hard times.

“The public may not draw the distinction between government policy and support coming directly from their bank, a detail of probably more concern for the government than the banks themselves.”

However, Mr Brecheisen said it was too soon to assume that public confidence in banks has been totally restored.

“It will be interesting to see what happens to confidence when the loans are called in and mortgage payments start again,” he said.

“Moreover, public confidence in financial institutions is not the same as trust in them – about one in five customers across Europe believe their bank looks out for their financial well being rather than putting its own interests first.

“If the financial sector can improve that number up as well it will be good for them and their consumers, and then we’ll really have something to celebrate.”