Banks to warn on more bad debts

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Fresh evidence of Britain's borrowing binge will emerge this week when Britain's two biggest banks detail the extent of their bad debts.

HSBC and Royal Bank of Scotland, and the specialist lender Bradford & Bingley, are due to issue trading statements this week, which will reveal how their loan books have performed.

Barclays admitted last week it could see no end to soaring levels of bad debts after they rose nearly one-third for the second successive half year.

The figures will be watched by voluntary organisations and consumer groups who fear the country's debt crisis is spiralling out of control. Rising debt in Britain has alarmed consumer groups and those dealing with the victims of the country's debt crisis.

Citizen's Advice recently reported a sharp rise in the number of people attending its network of offices seeking debt counselling.

The organisation reported 1.4 million people going through its doors in the 2005-2006 financial year, up 11 per cent on the previous year. A spokeswoman for Citizens Advice said: "Debt levels are increasing and it is worrying. Banks need to be responsible lenders.

James Eden, at Dresdner Kleinwort Wasserstein, said: "Barclays' figures were embarrassing and you won't necessarily see as bad a picture from its rivals. At other banks the retail bad debt charge is set to improve in the second half."