British banks are best in breed

Euromoney Limited, Registered in England & Wales, Company number 15236090

4 Bouverie Street, London, EC4Y 8AX

Copyright © Euromoney Limited 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

British banks are best in breed

With Brexit now upon us, as warnings abound of the damage it will inflict on the UK economy and the country’s financial sector, Euromoney follows its instincts and puts two British banks on our short list to be recognized as the world’s best.

Euromoney is not a cheerleader for the UK. It just reports on global finance. And the evidence is compelling that Lloyds and HSBC are now industry-leading examples of the two very different business models that have emerged among the world’s top banks since the financial crisis.

lloyds-hsbc-logos-160x186

Lloyds has specialized within one country. In 2019, regulators will require UK banks to place their domestic retail and business banking operations inside distinct legal entities with their own capital and liquidity buffers that cannot be drawn down to cover losses incurred in supposedly riskier international investment banking. 

Around 97% of Lloyds’ activities will fall within the ring-fenced bank.

Its determined chief executive, António Horta-Osório, who has restored the bank to the point where the UK government sold down its last share in May, has focused ruthlessly on costs. With a cost-to-income ratio now at 49%, Lloyds appears to have opened up a formidable competitive advantage. 

Offering basic banking services at low cost holds out the promise that banks might actually provide returns to shareholders without boosting profits by mis-selling to retail customers and later charging the compensation costs to equity investors.

Gift this article