Banks set for battle as Barclays bids for world domination; While

The battle for banking customers is hotting up, with Clydesdale and Barclays introducing new accounts and the HBoS group - which includes the Bank of Scotland, Halifax and Intelligent Finance - launching a wave of aggressive advertising.

The Bank of Scotland and Halifax are challenging their competitors to match the 3% credit interest they pay current-account customers. The Royal Bank of Scotland is ready to hit back with a counter- strike at HBoS over its plans to close 30 branches over the next few months. This will happen in some towns where there is currently both a Halifax and a Bank of Scotland branch - and is likely to be unpopular with many customers.

Clydesdale, meanwhile, is launching a new account called Current Account Choice. This pays 2% on credit balances - but requires customers to pay an annual fee of (pounds) 90.

However, it also offers competitive overdraft charges at 10%, and includes a year's free travel insurance for up to two adults and five children, as well as commission-free foreign currency and travellers' cheques.

Customers will also be offered discounts of at least 12% when booking holidays from certain operators - including Thomas Cook, Sovereign Worldwide and Cresta Cities - via Clydesdale's Holiday Line.

While Clydesdale looks to the summer sun, next week Barclays turns its attentions to a group of customers traditionally left out in the cold by high-street banks. It is launching a financial package called Destination UK, which will be aimed at foreign nationals who come to Britain to work on short-term contracts.

Up until now it has been almost impossible for such workers to get a UK bank account and access to financial services. Nobody, for example, will hand out a credit card without proof of three years' residency in the UK. This can make for a very miserable stay for the increasing number of foreign workers who have headed for our shores. They can find it all but impossible to buy goods over the telephone or internet, such as tickets for the theatre or for a flight. Most other forms of credit are also out of their reach.

However, next week Barclays launches a package tailor-made just for them. It comprises not only a bank account but an automatic overdraft facility and credit cards to help with the cost of setting up a life in Britain.

A Barclays spokesman said: "In the past, the concern was that when people arrived from abroad we had no proof of their credit history and debt records, or guarantees that they would stay in work.

"But that view is changing as larger numbers arrive each year from abroad. The international workforce is becoming more migratory. We believe that in the future a significant number of our accounts will belong to global customers, who stay with us as they move round the world to work."

Of these so-called "inpatriates" entering the country to work for up to four years, 50,000 come from the European Union, according to the latest data from the National Statistics International Passenger Survey, which monitors people entering and leaving the UK.

A further 24,500 arrive from Australia, while 14,100 come from South Africa, 10,400 from New Zealand and 12,900 from the US.

Around 12,000 come from African Commonwealth countries, while 10,000 come from Bangladesh, India, and Sri Lanka. Some 4700 Canadians arrive annually, as do 3000 Pakistanis and 1100 Caribbeans.

Destination UK is initially targeting young professionals and managers who earn at least (pounds) 25,000. It will offer them an automatic overdraft of (pounds) 1000 to help pay for any initial expenses, with annual percentage rate interest of 15.6%. They will also be given a credit card charging 17.9% APR with an automatic credit limit of (pounds) 2500 pounds, as well as a debit card and chequebook. They will have access to a tax service and to other forms of financial advice.

Copyright 2003 SMG Sunday Newspapers Ltd.
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