Increase: Four British banks – Barclays, HSBC, Standard Chartered and Lloyds – are expected to announce a 15 per cent increase in profits
Daily Mail | Jan 31, 2011
By Ben Griffiths
Four of Britain’s largest banks are preparing to unveil combined annual profits of more than £25billion next month.
At a time when austerity cuts are just beginning to bite, Barclays, HSBC, Standard Chartered and Lloyds are expected to tell the stock market their annual profits have grown by more than 15 per cent from the £21.5 billion figure they posted a year ago.
The £25billion total, based on City estimates, will include a profit of up to £6.5billion from Barclays, whose chief executive Bob Diamond was criticised this month for telling MPs that the time for bankers apologising for the global financial meltdown was over.
Mr Diamond is also in line for an £8million bonus this year. Barclays’ figure is lower than its £11.6billion profit in 2009.
HSBC is expected to post the biggest profits of 2010 with an estimated £13.5billion, while Standard Chartered – based in the UK but focused on emerging markets – will announce about £4.5billion, according to analysts at City investment bank Nomura.
The state-backed banks are expected to fare less well. Lloyds is due to announce about £1billion, while Royal Bank of Scotland – which is 83 per cent taxpayer-owned – will remain unprofitable with a loss of about £613million.
Britain’s big banks are expected to show a hefty gain from a year earlier because their bad loans are shrinking, helping to offset lower revenues from investment banking and trading activities.
Barclays is due to report on February 15, and RBS on February 24, a day before Lloyds. HSBC will announce its figures on February 28 and Standard Chartered on March 2.
News of the bumper profits haul will increase pressure on the Government to force the banks to increase lending to small businesses and the transparency of bankers’ pay deals.
Ministers have been in talks – called Project Merlin – with the banks on issues such as pay and lending but a final agreement has yet to be reached.
Lord Adair Turner, chairman of the Financial Services Authority watchdog, warned that society needs assurances from the banks that the financial collapse will never happen again.
In a Sunday newspaper interview, Lord Turner said more regulation was on the cards to stop banking’s riskier activities from moving to murkier, unregulated markets.
There were continued efforts to resolve the issue of how big banks could fail without bringing down the entire sector, he added.
Lord Turner also dismissed threats from London’s banks to shift their business to Singapore or Hong Kong to escape over-regulation in the UK as a ‘fantasy’.
He added: ‘I think the industry needs to recognise that society wants to be assured that measures that have been taken are robust enough to prevent this terrible crisis ever happening again.’
Chancellor George Osborne appeared to have softened his stance on banks during the World Economic Forum in Davos, Switzerland.
It was time to ‘move on’ from banker bashing, he said, and for the Government to ‘make it explicit that it wants the UK to be the undisputed European home of wholesale finance and great global centre of finance’.
But he added he would only do a deal with banks on bonuses and lending in return for state backing if it was a good deal.