Bulletin: U.K. Bank Earnings Lose Their Fizz In The Third Quarter - S&P Global Ratings’ Credit Research

Bulletin: U.K. Bank Earnings Lose Their Fizz In The Third Quarter

Bulletin: U.K. Bank Earnings Lose Their Fizz In The Third Quarter - S&P Global Ratings’ Credit Research
Bulletin: U.K. Bank Earnings Lose Their Fizz In The Third Quarter
Published Oct 30, 2023
4 pages (1507 words) — Published Oct 30, 2023
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Abstract:

LONDON (S&P Global Ratings) Oct. 30, 2023--Margin compression dented rated U.K. banks' third-quarter performance, but a solid earnings outlook and flexible balance sheets mean they can comfortably absorb less buoyant performances at the current rating levels. U.K. banks that reported third-quarter earnings in the past week included Barclays, HSBC, Lloyds, NatWest, Santander UK, and Standard Chartered. In all instances, net interest margins (NIMs) compressed quarter on quarter because of deposit migration to higher-rate products and continued pressure on mortgage yields on new lending. These trends are unsurprising considering rising interest rates, which incentivise the switch to term deposits and suppress demand for new lending. Yet, these trends played out faster in the third quarter than many U.K. banks' management teams

  
Brief Excerpt:

...October 30, 2023 LONDON (S&P Global Ratings) Oct. 30, 2023--Margin compression dented rated U.K. banks' third-quarter performance, but a solid earnings outlook and flexible balance sheets mean they can comfortably absorb less buoyant performances at the current rating levels. U.K. banks that reported third-quarter earnings in the past week included Barclays, HSBC, Lloyds, NatWest, Santander UK, and Standard Chartered. In all instances, net interest margins (NIMs) compressed quarter on quarter because of deposit migration to higher-rate products and continued pressure on mortgage yields on new lending. These trends are unsurprising considering rising interest rates, which incentivise the switch to term deposits and suppress demand for new lending. Yet, these trends played out faster in the third quarter than many U.K. banks' management teams had anticipated. NIM compression for the system's major banks averaged 11 basis points (bps) quarter on quarter on a reported basis, with NatWest reporting...

  
Report Type:

Bulletin

Ticker
BCBEY
Issuer
Barclays Bank PLC
GICS
Diversified Banks (40101010)
Sector
Global Issuers, Public Finance, Structured Finance
Country
United Kingdom
Region
United States
Format:
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Bulletin: U.K. Bank Earnings Lose Their Fizz In The Third Quarter" Oct 30, 2023. Alacra Store. May 05, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-U-K-Bank-Earnings-Lose-Their-Fizz-In-The-Third-Quarter-3080682>
  
APA:
S&P Global Ratings’ Credit Research. (). Bulletin: U.K. Bank Earnings Lose Their Fizz In The Third Quarter Oct 30, 2023. New York, NY: Alacra Store. Retrieved May 05, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-U-K-Bank-Earnings-Lose-Their-Fizz-In-The-Third-Quarter-3080682>
  
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