UK bank profits drop by 53%

Bank profits in the UK declined by more than a half over the past year, according to The Banker’s latest ranking of the top 1000 world banks.

The ranking is based on Tier 1 capital, a key measure of banking strength.

HSBC was the only European bank to appear in the global top 10 list for the 10th year running.
The bank, which is the largest in the UK, moved up one position to 8th in the global ranking.

Of the top UK banks, Lloyds Banking Group (ranked 3rd) recorded the highest percentage increase in Tier 1 capital (15.27 per cent) year-on-year, while Barclays (ranked 2nd) topped the group in asset growth (19.93 per cent).

But all five banks saw declines in pre-tax profits year-on-year. HSBC profits dropped by 24.2 per cent, Barclays by 28.72 per cent, Lloyds Banking group by 71.72 per cent, Standard Chartered by 56.56 per cent, and NatWest Group moved from profit to loss.

“The UK banking industry has faced significant headwinds over the course of the past year, with the impacts of the Covid-19 pandemic and Brexit uncertainty weighing profitability down,” said Joy Macknight, editor of The Banker. “Despite the challenging environment, the UK’s banking sector remains the fifth largest in the world, with aggregate Tier 1 capital of $437.5bn, underpinned by London’s position as a leading global financial centre.”

Western Europe as a whole had a challenging year due to low economic growth and the interest rate environment hitting the profitability of the region’s biggest lenders.

Of the largest European economies, banks’ aggregate pre-tax profits declined by 43.71 per cent in Germany, 75.72 per cent in Italy and 47.67 per cent in the Netherlands, while France experienced a more modest decline of 11.61 per cent.

Spain recorded negative pre-tax profits at an aggregate level, with two of its largest banks, Banco Santander and Bankia, moving from profit to loss in this period.

Worldwide banks added 12.7 per cent to their collective Tier 1 capital to reach the highest ever level of $9.9 trillion.

Total assets increased by 16 per cent $148.6 trillion, while the deposit base expanded by 17.1 per cent, to $93.9 trillion.

    Share Story:

Recent Stories

The Future of Intelligent Finance
FStech Group Editor Mark Evans sits down with Jason Cao, President of Global Financial Services Business Unit, Enterprise BG at Huawei ahead of its Intelligent Finance Summit which was held on 3rd and 4th of June in Shanghai. This Q&A delves into key trends in digital transformation of the financial services industry as well as a look at how data, robotic infrastructure, intelligent storage and innovative technologies are shaping the future for FSIs.

The Rise of Instant Payments
Instant payments are creating new business opportunities for banks by providing more touchpoints than ever. With these evolutions underway, Featurespace brought leading industry experts together to discuss how they are protecting customers from fraudsters in real time, utilizing innovative and disruptive solutions to reduce fraud. Click here to find out more.

Offloading Cyber Risk in the Cloud
As cyber attacks and data breaches are in the news on an increasingly regular basis - with regulatory penalties and customer trust on the line for financial services firms - it has never been more crucial to be compliant in the cloud.

This video, with Akamai’s EMEA director of security technology and strategy Richard Meeus, will help explain what your company can be doing to make sure it’s not embroiled in the next big fine or front-page scandal.