Retail banks in the UK made more money per customer than any other major business sector last year including power firms, it was claimed today.
Research by Group 1 Software - which helps banks and utilities to target marketing campaigns -showed banks made profits of £75 per account holder in 2005 compared with £66.20 in 2004.
The 13 per cent rise came from overdraft charges and penalty fees on bank accounts and credit cards as well as better targeting of customers, according to Group 1 Software.
And the figure outstripped the £59.10 surplus per customer made by utilities firms, and was also higher than the £50.90 made by retailers, the £39.40 by mobile phone companies, and £35.10 by general insurers.
Andrew Greenyer, vice-president of international marketing at Group 1 Software, said: "Excessive overdraft penalty charges and late payment fees on credit cards contributed in part to the increase."
But he added that "much of the increase" was because of "vastly improved means of communicating with the customer" through targeted mailing and improved product offers.
The comments came as UK banks reported record results for the first half of 2006.
This week has already seen HSBC post an 18 per cent rise in half-year profits to £6.71 billion, while Halifax Bank of Scotland yesterday said its profits were up 17 per cent to £2.65 billion.
The rest of the Big Five -Barclays, Royal Bank of Scotland and Lloyds TSB - are expected to follow suit in the next few days as they remain on track to eclipse the £34 billion they made last year. Of the £34 billion, Group 1 Software said the UK banking sector made pre-tax profits of £10.26 billion from retail operations alone in 2005.
The profits came from overdraft charges, penalty fees for late payments and interest on current accounts, credit cards, savings accounts, mortgages and Isas.
Earlier this year an investigation by the Office of Fair Trading found that customers were being charged more than £300 million a year in unlawful penalties on credit cards.
The watchdog warned that any penalty charge of more than £12 was unfair - prompting a cut in fees from the likes of Barclaycard, Lloyds TSB and HSBC.
But despite criticism from consumer groups, the profits per customer at banks in the UK compare favourably with those in Europe.
According to Group 1, retail banks in Italy made profits of £89.96 per customer in 2005 and in Spain the figure hit £84.49. Profits in Germany and France were lower at £67.13 and £67.26 respectively.