LONDON (Reuters) - Britain has no such thing as free banking, according to a report on the industry by the country's financial watchdog published on Wednesday.
The report found that one in 10 customers generate between a third and a half of all profits from British banks' current accounts, which pays for a system that allows people to access their cash for free.
"[The review] provides more evidence that there is no such thing as free banking," Andrew Bailey, Chief Executive of the Financial Conduct Authority, said in a statement.
Banks make money from fees on products such as overdrafts, the FCA found in its report, which effectively cross subsidise free current accounts.
Politicians have criticised the current system where the less well off are subsidising those who can afford to stay in credit.
Bailey said the aim was to find a "socially acceptable" level of cross-subsidy.
He told reporters in May that he wanted to look at the "basic fairness" of how costs and charges are allocated by banks.
The report also found that many consumers go to their current bank rather than shopping around when looking for other financial products.
More than half (52 percent) of current account customers also have a credit card with their bank, 48 percent have a personal loan and 32 percent have a mortgage.
The report will provide evidence to support the conclusions of a more wide-ranging FCA review into the retail banking industry's business models, due later in the year.
(Reporting by Emma Rumney and Huw Jones; editing by Simon Jessop and Jane Merriman)
