Banks to write off a further pounds 2.5bn
Sunday 25 July 1993
Lloyds, which will kick off the banks' interim reporting season on Friday, is likely to be the only exception. At about pounds 100m, its provisions will be less than half the level of the same time last year, partly because of earlier heavy provisioning and a policy of shrinking its loan book. Pre-tax profits will also rise from pounds 369m to more than pounds 400m.
Other banks reporting over the next few weeks, however, will show little change or a slight worsening in bad debts. Barclays is likely to show a small rise to over pounds 1bn compared with an already high pounds 995m at the same time last year. The bank is still trying to recover from disastrous property loans.
National Westminster's provisions may also be slightly higher at about pounds 1.1bn, compared with pounds 1bn last time, while Abbey National and Standard Chartered's provisions may also rise.
The banks have been hit by a continuing high rate of company collapses, particularly in the property sector. But some analysts believe that the first hints of recovery may show through in the results in the form of higher profits before bad-debt provisions are subtracted. Even Barclays is expected to show a rise in pre-tax profits from pounds 51m to about pounds 200m for the six months.
Despite the continuing effects of recession on bank results, the stock market has already begun discounting the effects of recovery by marking bank shares sharply higher. In the past 12 months, the sector has risen by 60 per cent in anticipation of better times to come, and the shares have outperformed the UK stock market by 30 per cent.
The shares have climbed because the stock market believes that the bad debt provisions have now peaked. But rumours of rights issues have emerged, puncturing the rallies in recent weeks.
- 1 This 'woman calls police to order pizza' story isn't going where you're expecting
- 2 Axe wielding man shot dead after attacking four New York policemen on busy street
- 3 Watch what happened when food critics were unknowingly served McDonald's
- 4 Jimmy Carr's Oscar Pistorius joke goes a bit too far at the Q Awards
- 5 Ottawa shootings: Bruce MacKinnon's cartoon is the perfect tribute to soldier Nathan Cirillo
Renee Zellweger on plastic surgery rumours: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
FCKH8: YouTube reinstates provocative anti-sexism video showing young girls swearing
Axe wielding man shot dead after attacking four New York policemen on busy street
This 'woman calls police to order pizza' story isn't going where you're expecting
McKamey Manor: This 'extreme' haunted house is the stuff of nightmares
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Attacks on 'Ukip Calypso' show how skewed people’s priorities are
London bus driver 'kicks gay couple off for kissing'
iJobs Money & Business
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...
£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...