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U.K. Lenders See Share of Global Banking Profit Fall by Half

RBS posted a full-year pretax loss of 5.17 billion pounds for 2012. Photographer: Matthew Lloyd/Bloomberg
RBS posted a full-year pretax loss of 5.17 billion pounds for 2012. Photographer: Matthew Lloyd/Bloomberg

July 1 (Bloomberg) -- U.K. banks’ share of global industry profit fell by half to 5 percent since 2007 as Chinese lenders gained during the financial crisis, according to research by The Banker magazine.

Chinese banks saw their share of pretax profit soar to 29 percent in 2012 from 4 percent in 2007, according to the study of 1,000 lenders published today.

U.K. bank earnings slumped in the period as companies including Royal Bank of Scotland Group Plc were bailed out by taxpayers and compelled to write down the value of loans, cut jobs and sell assets. Britain’s four largest lenders will have eliminated about 189,000 jobs by the end of this year from their peak staffing levels, bringing employment to a nine-year low, according to data compiled by Bloomberg.

“While U.K. banks as a whole have suffered tremendously in terms of their share of global banking profits, the performance of individual U.K. banks is extremely varied,” said Brian Caplen, editor of London-based The Banker, which is owned by the Financial Times. “Some are making huge profits, while others make huge losses.”

RBS posted a full-year pretax loss of 5.17 billion pounds ($7.9 billion) for 2012, while Lloyds Banking Group Plc, Britain’s biggest mortgage lender, recorded a 570 million-pound pretax loss. Barclays Plc’s pretax profit was 246 million pounds for the year and HSBC Holdings Plc’s $20.6 billion.

-- Editors: Jon Menon, Steve Bailey

To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net.

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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