A discussion on X has sparked renewed debate about how banks in the United Kingdom make money, following observations by UK-based Nigerian, Folowosele Adeboye, who questioned why everyday banking appears largely free compared with Nigeria.

In a widely shared post, Adeboye noted that after more than four years in the UK, he had not encountered charges commonly associated with Nigerian banking.

He listed the absence of stamp duty deductions, debit alert fees, VAT charges, and ATM withdrawal fees, even when using machines operated by banks he does not hold accounts with. He also pointed out that his card had never been retained by an ATM and that no unexplained deductions had occurred since he moved to the UK.

The post prompted a wave of responses from Nigerians at home and abroad, offering varying perspectives on how banking systems differ across countries.

Some respondents argued that the contrast reflects governance and institutional discipline rather than generosity. Princess Ehmy suggested that many African political and financial leaders are familiar with efficient systems abroad but fail to replicate them at home, blaming systemic failure rather than technical limitations.

Others offered a more technical explanation. Boluwatife noted that UK banks typically generate revenue through lending, mortgages, overdrafts, investments, and merchant transaction fees, rather than relying on frequent customer-facing charges.

According to this view, banks operating in more stable financial environments can afford to prioritise user experience over micro-charges.

Sir Alfredo echoed this sentiment, arguing that banks worldwide do not fundamentally depend on alert fees or stamp duties for survival, describing such practices as symptoms of weak or poorly structured systems.

Abimbola added that UK banks rely heavily on interest spreads — the difference between what they pay savers and what they charge borrowers — while Nigerian banks depend more on transaction fees because lending risks are higher.

Not all contributors agreed that UK banking is entirely cost-free. Oyo Messi pointed out that some UK current accounts attract monthly maintenance fees, citing a £17 monthly charge on a Santander Edge account.

Others highlighted overdraft penalties, international transfer fees, and credit card interest as less visible but significant revenue streams.

Agu_Gen explained that while basic banking may appear free, customers still pay indirectly through low savings interest rates and higher borrowing costs. The difference, he argued, lies in transparency and predictability rather than the absence of profit-making.

Several commenters contrasted this with Nigeria’s banking model, where transaction-based charges disproportionately affect low-income users.

Chike described this approach as “lazy banking”, arguing that excessive reliance on transfer fees and alerts shifts the burden onto the poorest customers rather than encouraging banks to expand productive lending.

Overall, the conversation reflects broader frustrations about financial inclusion, regulatory effectiveness, and economic structure. While UK banks are far from charitable institutions, the consensus among many respondents was that their profit models feel less punitive because costs are embedded in long-term financial products rather than daily transactions.

The debate also highlights a recurring theme among Nigerians in the diaspora: that efficient systems are possible, but require stable institutions, lower credit risk, strong consumer protection, and consistent regulation.

The Main Reason UK Banks Appear Free Compared to Nigeria's

UK banks appear “free” because most basic services are subsidised by profits from loans, mortgages, overdrafts, credit cards, business banking, and merchant fees.

In Nigeria, where lending risks are higher and defaults more common, banks rely heavily on transaction charges to remain profitable. The difference is not generosity, but structure, risk, and regulation.