The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

We need to talk about UK banks

While analysts focus on net interest margins and the turning credit cycle, there is an extraordinary risk hiding in plain sight.


Theresa May's effort to engineer a sensible looking soft departure has actually increased the risk of a no deal exit

In August UK banks will finally start reporting their second quarter results, limping in behind their US and European counterparts. Analysts can barely conceal their disregard. “Curb your enthusiasm ­­– if you had any,” suggest analysts at UBS, whose best hope is that net interest margins – the key sector risk in many investors’ minds – should at least prove stable in 2018, helped by falling wholesale funding costs.

Expect much nitty-gritty discussion of NIM, of the wider impact of HSBC’s plans to put funding and liquidity trapped inside its UK ring-fenced bank to work in building its share of mortgage lending and on Lloyds Banking Group’s continuing ambitions to grow higher margin, and so higher risk, consumer loans.

You might not tell it from their share price performance or valuations ­­– UK banks trade on earnings multiples at a substantial discount to their European peers, which themselves trade on price-to-book values still seemingly stuck in the crisis era – but UK banks have enjoyed a golden age.

UK unemployment and loan loss rates are at, or close to, their lows, yet wage price inflation is subdued.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree