The UK’s biggest banks are about to announce record-breaking profits after a year of higher borrowing costs. Barclays, HSBC, Lloyds and Standard Chartered will share their 2023 financial results this week.
Last Friday, NatWest reported its highest yearly profit since 2007, before the global financial crisis, which was a fifth more than the previous year.
The five banks are expected to report combined pre-tax profits of over £50 billion, a record amount that surpasses the peak before the 2007 financial crisis.
HSBC is predicted to report a profit of 34 billion US dollars (£27 billion), and analysts think Lloyds made £7.4 billion last year, breaking previous records for the groups.
Barclays is expected to report a pre-tax profit of £6.7 billion, less than the highs earned in 2021.
They will also update shareholders on their plans to cut costs, which will likely involve restructuring.
This follows NatWest’s announcement that it is focusing on managing business costs and improving efficiency in a challenging climate for the UK economy, which fell into a technical recession at the end of last year according to official figures.
Banks made a lot of money in 2023 because they were charging more for loans and mortgages than what they were giving to savers. This is called a net interest margin (NIM).
But now, banks are being asked to give more to savers and interest rates might go down this year. Matt Britzman from Hargreaves Lansdown thinks that what happens in 2024 could be more important than the results from last year. He said that Lloyds Banking Group makes most of its money from interest, so the net interest margin is very important.
He also said people will be watching to see if customers can’t pay back their loans. He added that people want to know how much Barclays is changing and if HSBC has been affected by problems in China’s property market.
