VYSOKÁ ŠKOLA POLYTECHNICKÁ JIHLAVA Obor Finance a řízení International Comparison of Bank Charges Associated with the Current Account Bachelor thesis Autor: Oksana Serednycká Vedoucí práce: Ing. Petr Jiříček Jihlava 2012 Annotation The bachelor thesis analyzes the topic of the banking system of the United Kingdom of Great Britain and Northern Ireland. The theoretical part describes the structure of the British financial system. Created profiles of the most important banking institutions in the UK and a brief analysis of commercial banking in the UK and in the Czech Republic are also included in the theoretical part. The basic data used for the analysis and comparison of financial statements and charges relating to the current account of selected banks, were collected from their official website and also on my own questionnaire. The analysis and comparison of individual financial statements and charges were performed using the data obtained. Opinions and client satisfaction were identified using questionnaires. Keywords Banking system, current account, bank charges, profit and loss statement, balance sheet Především chci poděkovat Ing. Petru Jiříčkovi za odborné vedení pří zpracování bakalářské práce. Mé poděkování také patří Mgr. Martině Benešové, Ph.D., která mi ochotně radila ohledně jazykové stránky mé práce. V neposlední řadě bych ráda poděkovala své rodině a přátelům za jejich podporu. Prohlašuji, že předložená bakalářská práce je původní a zpracoval/a jsem ji samostatně. Prohlašuji, že citace použitých pramenů je úplná, že jsem v práci neporušil/a autorská práva (ve smyslu zákona č. 121/2000 Sb., o právu autorském, o právech souvisejících s právem autorským a o změně některých zákonů, v platném znění, dále též „AZ“). Souhlasím s umístěním bakalářské práce v knihovně VŠPJ a s jejím užitím k výuce nebo k vlastní vnitřní potřebě VŠPJ . Byl/a jsem seznámen/a s tím, že na mou bakalářskou práci se plně vztahuje AZ, zejména § 60 (školní dílo). Beru na vědomí, že VŠPJ má právo na uzavření licenční smlouvy o užití mé bakalářské práce a prohlašuji, že s o u h l a s í m s případným užitím mé bakalářské práce (prodej, zapůjčení apod.). Jsem si vědom/a toho, že užít své bakalářské práce či poskytnout licenci k jejímu využití mohu jen se souhlasem VŠPJ, která má právo ode mne požadovat přiměřený příspěvek na úhradu nákladů, vynaložených vysokou školou na vytvoření díla (až do jejich skutečné výše), z výdělku dosaženého v souvislosti s užitím díla či poskytnutím licence. V Jihlavě dne ...................................................... Podpis Content Introduction ..................................................................................................................... 8 1 Theoretical part ..................................................................................................... 10 1.1 The Banking Systems ....................................................................................... 10 1.2 The British Banking System ............................................................................ 10 1.2.1 The Bank of England ................................................................................ 12 1.2.2 Commercial Banking in the UK ............................................................... 13 Commercial Banks .................................................................................................. 13 Building Societies ................................................................................................... 13 Insurance Companies .............................................................................................. 14 Pension Funds ......................................................................................................... 15 Trust Units .............................................................................................................. 15 Investment Trusts (Investment Companies) ........................................................... 16 1.3 Profiles of British Commercial Banks ............................................................. 16 1.3.1 HSBC Holding plc .................................................................................... 16 Progress on Strategy ............................................................................................... 17 Economic Outlook .................................................................................................. 17 1.3.2 Lloyds Banking Group plc ........................................................................ 18 1.3.3 Royal Bank of Scotland group plc ............................................................ 20 1.3.4 Barclays plc ............................................................................................... 22 1.4 The Analysis of Financial Sectors .................................................................... 23 1.4.1 Development of Financial Sector in Czech Republic ............................... 23 1.4.2 Developments in UK Banks and Other Financial Institutions .................. 25 2 Practical part ......................................................................................................... 26 2.1 Comparison of Barclays plc and Komerční banka, a.s. ................................... 26 2.1.1 Barclays plc ............................................................................................... 26 2.1.2 Komerční banka, a.s. ................................................................................. 29 2.1.3 Comparison of Bank Charges ................................................................... 39 KB Price List for Individuals .................................................................................. 39 Barclays Bank Charges ........................................................................................... 42 2.1.4 Comparison of Bank Charges of Barclays and Komerční banka ............. 43 2.1.5 Comparison of Income from Fees to Total Income in CZ and UK .......... 44 Barclays plc ............................................................................................................. 44 Komerční banka, a.s. ............................................................................................... 46 2.2 Results of Primary Research ............................................................................ 48 2.2.1 Profile of Respondents .............................................................................. 48 2.2.2 Representation of Individual Banks .......................................................... 50 2.2.3 Bank Monthly Charges for Working of Current Account ........................ 51 2.2.4 Opinion about Appropriateness of Banks Charges in Current Account ... 52 2.2.5 The Way how Clients Mostly Operate Their Current Account ................ 53 2.2.6 Satisfaction with Supply of Current Account ........................................... 53 2.2.7 Satisfaction with Bank’s Charges Policy .................................................. 54 2.2.8 Willingness to Exchanging Bank in Case of Charging Inappropriate Charges 55 Conclusion ..................................................................................................................... 57 Bibliography .................................................................................................................. 59 List of Tables ................................................................................................................. 61 List of Figures ................................................................................................................ 62 List of Annexes .............................................................................................................. 63 Czech Questionnaire ................................................................................................... 64 British Questionnaire .................................................................................................. 65 Introduction The structure and strategy of banks in each country varies according to the local culture. What remains is the same objective, which is to satisfy customers and to retain their loyalty. Banks try to offer a wide range of services for all of their specific clients. The author of this thesis has therefore decided to compare the structure of the two pre- selected banks and the fees associated with a current bank account with a bank that provides its services on the Czech banking market and banks that offer their services on the banking market in the UK. To perform a high quality thesis, the author entered the following three main objectives: 1. To compare the financial statements of selected banks, namely income statement, balance sheet and cash flow. 2. To analyse and compare the fees for a current bank account with two selected banks. 3. All work is concluded with a questionnaire to assess the overall satisfaction rating of clients of British and Czech banks. Primary and secondary data will be used to evaluate this thesis. Official websites of banks that provide services in the Czech Republic and in the UK will be a tool for obtaining secondary data. Own calculations and the comparison of financial statements will be the primary source for evaluating the thesis. Questionnaires are another primary source; the questionnaires were filled in by correspondents interviewed in the UK and the Czech Republic. The thesis should outline the differences in the financial statements which are associated with the activities of banks and different accounting