Big four banks are set to report bumper profits of £14BILLION – but customers are still stuck with pitiful savings rates
- Barclays, HSBC, Lloyds and Royal Bank of Scotland expected to reveal combined profit of £13.6billion
- Some savers still stuck with accounts paying less than 0.5 per cent interest
Long-suffering savers are demanding to share in banks’ success as the big four lenders prepare to report bumper profits of nearly £14billion.
Analysts at Morgan Stanley expect Barclays, HSBC, Lloyds and Royal Bank of Scotland to unveil a combined £13.6billion profit for the first half of 2018 in the coming days.
But this bonanza has done nothing to help customers, who are still stuck with easy access savings accounts paying less than 0.5 per cent interest on average.
This is far below inflation, meaning savers’ money buys less every year, and would see a deposit of £10,000 generate fewer than £50.
The big four banks are expected to announce bumper profits, while closing branches and some savings accounts languish on pitiful rates
With the Bank of England widely expected to hike interest rates this Thursday – taking them above 0.5 per cent for the first time since 2008 – industry profits are expected to rise again.
The City watchdog last week said banks could be forced to give savers a boost amid growing anger. These huge profits will also pile on pressure for a rethink of branch closures and other cost cutting.
James Daley of consumer group Fairer Finance said: ‘It’s the age-old problem of banks prioritising their shareholders and doing what they can get away with to their customers.
‘There are still billions of pounds languishing in accounts that pay 0.5 per cent or less, and as interest rates rise that gets harder and harder to justify.
‘If the banks don’t start treating their loyal customers far more reasonably, they may end up with a pretty heavy-handed regime against them.’ Lloyds could post first-half profits of £3.1billion, according to Morgan Stanley, in its best results since the crisis.
The analysts expect the bank’s net interest margin – the difference between what it earns in interest from borrowers and pays to savers – to rise to 2.95 per cent, the highest since 2006.
This suggests even more profit is being squeezed out of its customers and will open it up to claims that savers are not getting their fair share.
A profit of £989million is expected at Natwest owner Royal Bank of Scotland. This would have been even higher but for a £3.7billion pay-out to settle US charges of wrongdoing before 2008.
Morgan Stanley expects RBS profits to rise to £3.5billion in 2019 and £5.6billion the year after as the lender’s health returns, with all this cash to be doled out to investors in dividends and buybacks.
At HSBC, strong growth in Hong Kong and the US is expected to trigger profits of £8.3bn, and Barclays is predicted to have made a £1.2billion profit.
The results come after the Financial Conduct Authority said it may force banks to pay a minimum savings rate to long-standing customers.
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