Banks in the UK Now Being Closely Scrutinized

This week the four largest banks in the UK will release the results for the first six months of this year and when they do, bad loans and lending levels will come under close examination. While experts believe that a resurge in financial markets should have fueled better performance, there is an expectation that losses on business loans and mortgages may have risen. The banks will be expected to show that they have increased lending to help consumers during this recession.
While Lloyds and Royal Bank of Scotland will most likely continue to struggle, HSBC and Barclays are expected to show the best results. All of the banks know that they need to be seen as keeping to a commitment to increasing lending to businesses. This may be due, in part, to the fact that Chancellor Alistair Darling recently encouraged banks to begin taking on a role in promoting economic recovery. Darling also publicly worried that smaller businesses were being charged interest rates that seemed unreasonably high and could lead to excessive debt for these firms.
The alleged economic recovery has helped the investment banking arm of Barclays and it is expected that the bank will report nearly £4bn in pre-tax profit. Due to what analysts say are a number of accounting technicalities and one-off gains, HSBC is expected to report £3bn in profits. Neither HSBC nor Barclays accepted the government bail-outs. Both banks are actually outperforming the expectations of some, with Barclays still able to keep its investment bankers paid a cool £250,000 for half a year’s worth of work, according to reports from the Sunday Times. This level of payout has drawn criticism for US firm Goldman Sachs when they gave similar bonus payouts shortly after government bailouts.
Lloyds Banking Group, which took over HBOS in the midst of 2008’s financial crisis is expected to report nearly £5bn in losses later this week. Meanwhile, RBS is expected to report that they have come close to breaking even with profits of £1.2bn despite the fact that in 2008 they reported the largest corporate losses in UK history at £24bn.
As the recession continues to cause homeowners and bussinesses to struggle, as well as triggering job losses, it is expected that the scale of bad loans at the banks will become a major focal point for analysts and the public alike.

This week the four largest banks in the UK will release the results for the first six months of this year and when they do, bad loans and lending levels will come under close examination. While experts believe that a resurge in financial markets should have fueled better performance, there is an expectation that losses on business loans and mortgages may have risen. The banks will be expected to show that they have increased lending to help consumers during this recession.

While Lloyds and Royal Bank of Scotland will most likely continue to struggle, HSBC and Barclays are expected to show the best results. All of the banks know that they need to be seen as keeping to a commitment to increasing lending to businesses. This may be due, in part, to the fact that Chancellor Alistair Darling recently encouraged banks to begin taking on a role in promoting economic recovery. Darling also publicly worried that smaller businesses were being charged interest rates that seemed unreasonably high and could lead to excessive debt for these firms.

The alleged economic recovery has helped the investment banking arm of Barclays and it is expected that the bank will report nearly £4bn in pre-tax profit. Due to what analysts say are a number of accounting technicalities and one-off gains, HSBC is expected to report £3bn in profits. Neither HSBC nor Barclays accepted the government bail-outs. Both banks are actually outperforming the expectations of some, with Barclays still able to keep its investment bankers paid a cool £250,000 for half a year’s worth of work, according to reports from the Sunday Times. This level of payout has drawn criticism for US firm Goldman Sachs when they gave similar bonus payouts shortly after government bailouts.

Lloyds Banking Group, which took over HBOS in the midst of 2008’s financial crisis is expected to report nearly £5bn in losses later this week. Meanwhile, RBS is expected to report that they have come close to breaking even with profits of £1.2bn despite the fact that in 2008 they reported the largest corporate losses in UK history at £24bn.

As the recession continues to cause homeowners and bussinesses to struggle, as well as triggering job losses, it is expected that the scale of bad loans at the banks will become a major focal point for analysts and the public alike. The hope is that people will continue to solve their debt problems by entering into Individual Voluntary Agreements that actually help them eliminate their debt.

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