Britain’s biggest banks are set to report bumper profits despite rules that are meant to make them act in customers’ best interests.
Lenders have come under fire for not passing on a series of recent interest rate rises to savers while ramping up mortgage and other borrowing costs, leading to claims of ‘profiteering’.
The rules oblige banks and other financial firms to seek better outcomes for customers.
Booming: City analysts expect lenders to make even more money than before when they unveil third quarter results
But City analysts expect lenders to make even more money than before when they unveil third quarter results this week, the first since new ‘consumer duty’ rules were introduced in July.
Gary Greenwood, banking analyst at Shore Capital, said banks will report another ‘robust’ period of profits. NatWest, which was bailed out by the taxpayer during the financial crisis, is forecast to make around £2.8 billion in net interest income – the difference between what they pay savers and charge borrowers – in the three months to September.
This is £200 million more than last year. Lloyds Banking Group, Britain’s biggest lender and owner of the Halifax brand, is set to scoop almost £3.5 billion, an increase of £100 million on a year ago.
Between them, Lloyds and NatWest are in line to rake in net interest income of more than £25 billion this year – up from just under £23 billion in 2022.
‘Consumer duty was always going to be a slow burn,’ said James Daley of campaign group of Fairer Finance.
NatWest may also give an update on the independent review into the de-banking scandal that cost Alison Rose her job as the banking group’s chief executive.
Rose was forced to quit after it emerged she had discussed details of former Ukip leader Nigel Farage’s account with a journalist. Farage has since moved his banking arrangements to Lloyds.
The big bank reporting season kicks off with Barclays on Tuesday. The lender will be under pressure to explain why chairman Nigel Higgins appeared to take at face value reassurances from former chief executive Jes Staley about his relationship with convicted paedophile Jeffrey Epstein.
Staley was earlier this month fined and banned from the City for misleading regulators and the lender’s board, including a claim that his last contact with Epstein had been ‘well before’ he joined Barclays as chief executive in 2015.
The Mail on Sunday revealed links between Staley and Epstein just three days before his appointment at Barclays. Staley, who stepped down in 2019, plans to appeal the regulator’s decision.
