UK banks not seeing deposit ‘flight to quality’ after SVB collapse – Lloyds CEO

Lawrence White and Iain Withers

LONDON (Reuters) – British banks are not yet seeing a “flight to quality” Charlie Nunn, Lloyds chief executive, stated Tuesday that there was a surge in deposits from customers concerned about the safety of their money after the collapse of Silicon Valley Bank.

“What’s happened with SVB is relatively idiosyncratic compared to the UK,” Nunn spoke at a Morgan Stanley event about the collapse of the specialist lender which has caused widespread banking turmoil worldwide and a stock market crash.

As fears of contagion to other lenders grew, shockwaves from the fall of Silicon Valley Bank continued to pound bank stocks in Asia and Europe.

According to the Financial Times, major U.S. banks like JPMorgan and Citigroup saw a surge in customers who wanted to move their accounts to bigger lenders.

“We haven’t seen what we’ve seen in the U.S., which is the flight to quality,” Nunn. “But let’s see how that plays out and we’ll see how people feel over the next period of time.”

The U.S. has taken urgent measures to offer banks vulnerable to a ran on deposits special access for additional funding. But assurances by President Joe Biden, and other policymakers, have so far failed to calm markets.

Analysts and investors now expect tweaks to the global interest rate policies in order to keep runaway inflation under control. Any rate hikes will likely affect some bank balances.

(Editing by Sinead Cruis)