Barclays (LON: BARC ), with a market cap of 29.25B USD and a notably low P/E ratio of 4.42 according to InvestingPro data, has announced that it will stop offering personal current or savings accounts to UK nationals living abroad. This decision has sparked concern among expats who rely on these accounts to access their savings and pensions. The bank's decision follows a review of its international offerings that began in 2021. Affected account holders have been issued a six-month warning, allowing them time to seek alternatives.
Expats have the option to open a Barclays global account, which requires maintaining a minimum balance of £100,000 at all times or paying a monthly fee of £40. This account allows customers to make notice-free withdrawals at ATMs worldwide with a sterling debit card and can be opened in one of three major currencies: US dollars, sterling, or euros.
Nigel Green, CEO and founder of deVere Group, warned British expats about this change in banking services since November 2020. He explained that many high street banks are focusing more on domestic markets due to the increasing compliance requirements associated with serving customers abroad. Green suggested that other British banks might follow Barclays' lead and modify their services for expats.
Barclays, a prominent player in the Banks industry as per InvestingPro Tips, has been trading at a low Price / Book multiple and a low earnings multiple. Yet, it's worth noting that the bank's revenue growth has been slowing down recently, with a quarterly decline of -9.14% reported for FY2023.Q2.
The closure of these accounts could cause significant disruption for individuals, families, businesses, and other organizations that have deposits, standing orders, regular payments, and credit facilities with another bank. Green urged those affected to seek alternative services from banking providers who already operate under cross-border regulations.
While the expat mortgage market hasn't seen similar changes recently, brokers have reported a general tightening on expat lending rules over the past few years. Richard Campo, founder of Rose Capital Partners, noted that smaller building societies tend to be more accommodating for expat cases where larger lenders shy away due to their manual underwriting approach.
Barclays has clarified that it has been closing expat accounts for several years as part of a policy shift. The bank's UK products are designed for customers within the UK, and it no longer plans to offer these to retail customers registered outside of the United Kingdom, with limited exceptions. The bank is contacting impacted customers to provide advance notice and explain the necessary next steps.
The Financial Conduct Authority (FCA) stated that banks can set their own requirements on the country of residence for account holders and must comply with local law and regulation when serving customers outside the UK. If customers feel their accounts have been closed unfairly, they have the right to complain to the Financial Ombudsman Service. For more insights on the company's financial performance, readers can visit InvestingPro's dedicated page for Barclays here.
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