Banks are enacting their own second bailout, so to speak, as they exploit the very ones who keep them in business, their customers. The Bank of England suggested last week that the reduced competition has created an environment suitable for banks to take more and more from their borrowers. In a surprising statistic just released, Financial Mail conducted an analysis on a range of widely used banking services. Their findings showed that banks and building societies are skimming off bigger profits today than at any point during the past ten years.

The most noticeable details about the findings of the analysis are this - even though the base rate sits at a record low 0.5 per cent, banks and building societies have not cut their rates associated with lending hardly at all. This results in a bigger piece of the profit pie for the bank.

What is traditional practice with banks is when savings rates get lowered, so do lending rates. Well, currently rates for savings accounts have been slashed and, again, lending rates remain at comparable levels of when the base rate was much higher.

The banks answer to this bloated profit margin on lending idea is that they need to rebuild capital reserves to pre crisis day’s levels.

The types of lending banks are really scoring on is an easy one. Mortgage loans are the biggest cash cows for banks right now by far.

For example, when the base rate was 5.75 per cent, the borrower was paying 6.18 per cent. Now, with the base rate at 0.5 per cent, the borrower pays 3.54 per cent.

Now, obviously the bank has to make money for administrative costs, profit and so on. But for an economy in a dreadful state, give the borrowers a break.

The banks have other ways of making money. They include credit cards, saving accounts, personal loans and lets not forget overdraft charges.

Banks are doing quite well these days it seems. They need to always keep in mind though, what keeps the doors open - customers.