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30 Jun 2020
British Banking Barometer
NatWest Group Plc (NWG:LON), 276 | Standard Chartered PLC (STAN:LON), 664 | Barclays PLC (BARC:LON), 185 | Lloyds Banking Group plc (LLOY:LON), 50.9 | HSBC Holdings Plc (HSBA:LON), 646 | Metro Bank Holdings Plc (MTRO:LON), 31.4
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British Banking Barometer
NatWest Group Plc (NWG:LON), 276 | Standard Chartered PLC (STAN:LON), 664 | Barclays PLC (BARC:LON), 185 | Lloyds Banking Group plc (LLOY:LON), 50.9 | HSBC Holdings Plc (HSBA:LON), 646 | Metro Bank Holdings Plc (MTRO:LON), 31.4
- Published:
30 Jun 2020 -
Author:
Guy Stebbings -
Pages:
21
Introducing the latest edition of our monthly British Banking Barometer....
What is it?
An extensive database on UK lending volumes, margin and asset quality, providing an up-to-date view on the outlook for UK bank performance. Our monthly presentation incorporates a comprehensive analysis of key UK bank data - with our proprietary algorithm ranking this against a historical series and the output determining the score in each of our 3 Barometers.
Summary - A mixed picture
Following the widespread decline evident last month, this month trends are more mixed. New NPL formation (and new payment holidays) remains elevated but have declined since April. Margins remain under considerable pressure, however new mortgage lending spreads continue to widen and where possible banks are cutting deposit rates materially. Our volume barometer score improves for the first time this year despite bleak household lending trends thanks to the strength of the various government guaranteed business lending schemes.
Further detail
Volumes: Unsecured credit trends remain dire with balances having now fallen 7% since March (13% for credit cards), while monthly mortgage approvals have now declined to levels below those experienced at the peak of the financial crisis. The bright spot is the corporate sector given the over GBP40bn of lending through the various government guarantee schemes, particularly for smaller businesses. Our Barometer score increases for the first time in 2020 as a result but remains in ''lacklustre'' territory.
Margin: Margins remain challenged given the re-pricing of back book mortgages, lower structural hedge contributions with a further decline in swap rates and the impact of negative mix effects (the latter an additional headwind not captured in our Barometer score). But there is some respite for the banks with further spread widening on front book mortgage...