UK banks to come under scrutiny

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Bad debts and lending levels will be under scrutiny as the UK's four biggest banks release their financial results this week.

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Re: UK banks to come under scrutiny

UK banks to come under scrutiny


Banking results should show the sector recovering from the financial crisis

Bad loans and lending levels will be under scrutiny as the UK's four biggest banks release their results for the first six months of the year this week.
A recovery in financial markets will have bolstered their performance but losses on mortgages and business loans are expected to have risen.
They will also be under pressure to show that lending has increased.
Barclays and HSBC are likely to see the best results, with Lloyds and Royal Bank of Scotland still struggling.
The banks will also feel obliged to show that they have kept to a commitment to increase lending to businesses.
The Chancellor, Alistair Darling, recently urged the banks to play their part in promoting economic recovery and expressed concern that smaller firms are being charged high interest rates.
Recovery?
Barclays, which will unveil its results on Monday along with HSBC, is expected to report a pre-tax profit of around £4bn, as the recovery in financial markets helped its investment banking arm.
HSBC should also report a profit of around $5bn (£3bn). However, its results will be flattered by a number of one-off gains and accounting technicalities, analysts said.
Both Barclays and HSBC did not accept government bail-outs.
Barclays could pay its investment bankers an average of £250,000 for six months' work, the Sunday Times reported.
In the US big bonus payouts from the likes of Goldman Sachs less than a year after banks were bailed out by the government have attracted criticism.
Later in the week, Lloyds Banking Group, which took over HBOS at the height of the financial crisis last year, is expected to report a loss of around £5bn.
RBS, meanwhile, is expected to have broken even with a profit of around £1.2bn after reporting the UK's biggest corporate loss in history of £24bn in 2008
The scale of bad loans at the banks will also be in focus as the recession leads to more job losses and homeowners and business struggle.