2019 seems like a distant memory to most of us. It was a year which was marked by two missed Brexit deadlines, an escalating trade war between the US and China and an ever-stagnant Eurozone. The 2019 performances of the five major UK banks provided a very mixed picture. Away from this turbulence in global trade and international politics, it became obvious that the UK banking sector had more challenges to overcome closer to home.
HSBC continues its progress towards appointing a permanent Group Chief Executive, while posting a disappointing set of results. The bank’s overall profits dropped 33% year on year, primarily due to losses and write-offs in its Commercial banking and European operations. Annual profit before tax was £10.3bn and was largely attributed to its strong performance in the Asian markets.
Santander posted a 37% decline in profit year on year, citing increasing strategic and regulatory costs. The decline, in part, reflects a need to streamline operations and create a more agile approach to the bank, notwithstanding the increased margin pressures within the mortgage market. Profit before tax was £981m, down from £1,567m the year before.
The issue of PPI continued to haunt Lloyds financial results through 2019 as they reported a significant 26% drop in pre-tax profits, down to £4.39bn. Lloyds Group Chief Executive Antonio Horta-Osario was the most vocal of the five banks’ CEOs of the uncertainty risks for 2020, calling out Brexit uncertainty as a continuing theme through the year.
The Royal Bank of Scotland Group reported a year on year increase of nearly 100% as profits rose to £3.1bn from £1.6bn in 2018. The announcement came alongside its plans to change its name to the ‘NatWest Group’, citing the shift in customer base across the group, with around 80% of the customers utilising the NatWest brand. The government continues to be a majority shareholder in the group at around 62% and CEO Alison Rose has reiterated her intentions to continue making the group a smaller and safer bank for retail and commercial clients across the UK.
Barclays enjoyed an impressive year, with full-year results outperforming market forecasts in key performance indicators of profit, revenue and return on equity. Pre-tax profit increased 9% year on year to £6.2bn, with overall revenue rising 2% to £21.6bn. Innovation and expansion of the bank’s digital proposition as a whole underpinned the strategic objectives for the bank, set out by CEO Jes Staley.