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magazineBank results by numbers
Despite an increase in interest rates and the biggest combined quarterly profit for the banks since 2013, the sector's reporting season got a lukewarm reception from the market.
Against this backdrop, we take a look at key facts and figures which reveal how the big four of Barclays (BARC), HSBC (HSBA), Lloyds Banking (LLOY) and Royal Bank of Scotland (RBS) are getting on.
The £2bn in litigation costs and fines drew investors’ attention away from a solid underlying performance at Barclays. Another round of PPI costs and £1.4bn settlement with the US Justice Department saw statutory pre-tax profit fall 41% to £922m. Although, once the impact from these costs was stripped out pre-tax profit was actually up 20% to £3.7bn.
HSBC’s ‘jaws’ – measuring income growth against cost increases – came in at -6% as the company continued to pursue a programme of heavy investment. Management have pledged to return to positive jaws by the year end.
Lloyds common equity tier 1 ratio, a key measure of its ability to withstand financial shocks, increased from 13.9% to 15.1%. This provides a degree of reassurance, helpful given the company’s heavy domestic focus and increased exposure to consumer debt could make it particularly vulnerable to Brexit uncertainty.
RBS is set to pay its first dividend since the financial crisis of 2p per share, subject to a settlement with the US Department of Justice, although the share overhang created by the Government’s 62% stake remains an issue (see page 28).
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