UK banks rebound with surge in profits

It was a strong year for UK banks in 2021, with the four biggest lenders – HSBC, Barclays, Lloyds Banking Group and NatWest – all posting a significant increase in profits compared with the previous year.

HSBC, the UK’s largest bank by Tier 1 capital, saw pre-tax profits rise to $18.9bn in 2021 compared with $8.8bn in 2020. Barclays’ profits rose from £3.3bn to £8.4bn, while Lloyds saw an increase from £1.2bn to £6.9bn of profits over the same period. Meanwhile, NatWest returned to profit last year, posting a pre-tax profit of £4.3bn after recording a pre-tax loss of £400m in 2020.

“There were no major surprises,” says Laura O’ Sullivan, UK and Ireland banking and strategy lead at Accenture. “It was broadly in line with what we expected. There were some historical write-offs. The bottom line results were a little bit better than we had expected. We’ve seen loan impairments being written off and a growth in the mortgage book over the past 18 months. 

“Overall, the outlook for this year looks good and there are reasons to be bullish, but there are still risks, with some uncertainty around not just potential Covid variants, but the impact of inflation and the geopolitical backdrop.”