Banks 'set for more job losses'
Monday 19 March 2012
Further job losses in the banking sector are on the way, a report said today, after the eurozone debt crisis, compensation costs and higher taxes slashed the combined profits of the UK's five biggest banks.
Barclays, HSBC, Lloyds Banking Group, RBS and Standard Chartered made combined pre-tax statutory profits of £19.4 billion in 2011, down 13% on the previous year, professional services firm KPMG said in its UK Banks: Performance Benchmarking Report.
The costs associated with the payment protection insurance mis-selling scandal, which amounted to a combined £5.7 billion, and the £1.3 billion bank levy charge have held back bank's financial performance, KPMG said.
The report also found that after aggressive cost cutting and restructuring, including the offloading of non-core businesses, retail banking fared better than investment banking where revenues declined sharply compared with last year.
Bill Michael, UK head of financial services at KPMG, said: "It was a tougher year than many expected and banks will need to continue working hard to turn things around.
"I expect we will see continued cost costing which inevitably means further job losses and business models will be reviewed again to ensure banks are concentrating on their core strengths and the markets with the greatest potential."
The banks with larger exposure to Asian economies were the star performers, KPMG said, reinforcing how the UK and Europe are becoming difficult places for banks to do business.
HSBC, which has 49% of its business based in Asia and Latin America, and Standard Chartered, with 80% of its business in Asia and the Middle East, outperformed the more UK and US-focused banks.
As the amount of capital and liquidity required to write business in the UK becomes higher than in other jurisdictions, it is increasingly difficult for banks without an international focus to achieve the return on equity expected by investors, KPMG said.
Mr Michael said the cost of regulation is "starting to bite" and will not ease off, as work on implementing the Independent Commission on Banking recommendations heats up.
He went on: "All in all, banking in this country requires major changes in business models and remuneration levels for staff to meet the increased capital requirements."
The investment banking sector had "a year to forget", KPMG said, as the eurozone crisis and subdued market activity made life hard.
However, 2012 has also started well and some mild optimism has returned.
Swedish stars ask fans for £195 pledges on crowd-funding website
voicesJust when you thought you could find a man, get married, and have a baby by the age of 35... it turns out you’re too late, says Grace Dent
sportNapoli 2 Arsenal 0: Gunners must now face either Real Madrid, PSG, Bayern Munich, Atletico Madrid or Barcelona in knock-out stages
musicAs Mariah Carey and Noddy Holder rake in the royalties from their classics, why there hasn't been a decent festive hit for 20 years?
theatreAuthor Daniel Rosenthal recalls the mishaps that almost brought the curtain down on the likes of John Gielgud and Diana Rigg
filmFilm producers sue Warner Bros for $75m over Hobbit films
lifeAs the Royal Mail plans to phase out deliveries on two wheels, it's no wonder posties are in a spin
musicThe 21-year-old beat Ella Eyre and Chlöe Howl to win the honour
lifeFull of the joys and want to help your fellow man? December isn't the time to do it
techLuke Blackall reports on precision engineered prams and babygros that monitor your child 24-7
Nelson Mandela memorial: ‘Bogus’ interpreter made mockery of Barack Obama’s tribute
David Cameron explains selfie with Obama and Helle Thorning-Schmidt at Mandela Memorial
French café starts charging extra to rude customers
Krokodil in Mexico? Teenager hospitalised after 'injecting drug into her genitals'
Australia incest case: Filthy and severely deformed children found in remote farming community after generations of inbreeding
- 1 Nelson Mandela memorial: ‘Bogus’ interpreter made mockery of Barack Obama’s tribute
- 2 It’s shameful that our universities have accepted gender segregation under pressure from the most oppressive religious fanatics
- 3 John McAfee's $100 'anti-NSA' device: 'this is coming and cannot be stopped'
- 4 Is Facebook making us forget? Study shows that taking pictures ruin memories
- 5 Australia incest case: Filthy and severely deformed children found in remote farming community after generations of inbreeding
- < Previous
- Next >
iJobs Money & Business
£77099.84 - £96375.26 per annum + Bonus + Benefits : Harrington Starr: My clie...
£45000 - £60000 per annum + Bonus and Package: Harrington Starr: Trading appli...
£50000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: A leading prov...
£70000 - £90000 per annum + BONUS + BENEFITS: Harrington Starr: A leading mark...