UK banks set to report record profits of £37bn beating pre-financial crisis highs13 Feb 2023 22:17
The UK’s top banks are set to unveil record profits in the next two weeks after sharp interest rate hikes boosted the lenders’ coffers last year.
The big five FTSE 100 banks – Barclays, HSBC, Lloyds, NatWest and Standard Chartered – could post cumulative pre-tax profits of £37.4bn as they reveal their earnings for 2022, analysts at AJ Bell said.
“If that forecast is accurate… then the quintet would put up a performance four per cent higher than in 2021 and exceed the pre-financial crisis high of £35.7bn generated in 2007,” Russ Mould, investment director at AJ Bell, told City A.M.
After a decade of ultra-low interest rates, sharp hikes throughout 2022 widened banks’ net interest margins – the difference between what banks pay out and receive in interest payments – and earned them bumper profits.
Mould said that each basis point move was “the equivalent of an extra £240m in pre-tax profit” on an aggregate loan book of £2.4trn across the five banks.
The growing profits has drawn the ire of political figures in recent months who have accused bank bosses of profiteering from central bankers’ moves to tame inflation.
Lib Dem treasury spokeswoman Sarah Olney told City A.M. yesterday that the profits will “seem like a kick in the teeth” for working people while mortgages go up by “hundreds of pounds a month for Londoners”.
The bosses of Barclays, HSBC, Lloyds Banking Group and NatWest were last week forced to defend the rates they pay savers and charge borrowers under hostile questioning from the influential Treasury Select Committee.
https://www.cityam.com/uk-banks-set-to-report-record-profits-of-37bn-beating-pre-financial-crisis-highs/
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