UK banks may never recover from crisis
BRITAIN’S banks may never recover the global stature they held before the financial crisis, a global survey published today claims.
Profits at UK-based banks last year were 58 per cent below the record takings they posted in 2007, according to The Banker magazine’s Top 1,000 World Banks ranking.
Britain’s banks have struggled to compete against foreign rivals, as a wave of tough new regulations and a sluggish domestic economy weighs on performance.
Foreign lenders, particularly in China and the East, have capitalised on a booming Asian economy, edging out UK-based banks.
Four years ago, British banks were the second most profitable in the world after American banks, according to The Banker. Now they languish in fifth place.
This comes despite global banking profits having recovered to almost pre-crisis levels. The combined profits of all banks in the Top 1,000 stood at $781bn (£487bn) in 2007, and in 2010 hit $709bn.
HSBC placed the highest of all British lenders on the magazine’s annual ranking, which dates back more than 40 years, helped by its strong presence in Asia. The bank moves from fifth to third in the ranking, based on Tier 1 capital held at final-year results for 2010.
“The British banking sector was the envy of the world in the boom years. It now faces a Herculean task to regain the position of strength it had four years ago,” said Brian Caplen, editor of The Banker.