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Top 1000 World BanksSeptember 1 2021

Investec UK crowned best-performer among largest UK banks

Well capitalised and liquid going into the crisis, UK banks not only survived the impact of the Covid-19 pandemic but also helped the government support other businesses during it. However, other challenges, such as Brexit, remain.
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The British economy is enduring the twin shocks of the Covid-19 pandemic and the country’s exit from the EU. Brexit has contributed to a high degree of social and economic dislocation, and fuelled uncertainty over the prospects of whether London can remain a global financial centre in the future. The pandemic has compounded these problems by providing an immediate and shocking hit to the country’s economic trajectory. Indeed, the UK registered a contraction of gross domestic product in the order of 9.9% in 2020, its biggest annual drop in about 300 years. 

Banking in this environment is not easy. But going into the pandemic, and in the immediate aftermath of Brexit, UK banks were both highly liquid and well capitalised. Fortified balance sheets and strong digital banking propositions ensured that most of the country’s largest lenders have weathered these difficulties well. Indeed, British banks have been instrumental in distributing government support schemes to the private sector and, more recently, the self-employed. As such, The Banker’s Top 1000 World Banks ranking 2021 reflects the strength of the British sector.

The country’s best-performing lender out of the 10 largest UK banks was international banking and wealth management outfit Investec UK, with a score of 5.47. A strong showing in the growth, profitability, soundness and leverage metrics underpins this chart-topping outcome for the bank.

Meanwhile, HSBC, the UK’s largest banking institution and eighth-placed lender in the global Top 1000 ranking, places an overall second in the best-performing table for the country. HSBC is particularly strong in terms of its leverage and liquidity numbers. The bank is in the midst of a major overhaul of its business, including the movement of personnel and capital from west to east, as well as focusing on its wealth management proposition in Asia. In common with many other banks, HSBC is also pushing ahead with an ambitious cost reduction programme. 

Meanwhile, Yorkshire Building Society emerges in a close third position, with a score of 5.29. Its strong profitability numbers and asset quality metrics underscore this impressive achievement. Among the other big-hitting UK banks, Barclays secures fourth position with a score of 5.17, thanks to its noteworthy liquidity and operational efficiency figures, while Lloyds Banking Group comes in sixth place with a score of 5.05, helped by its soundness, leverage and operational efficiency metrics. In addition, Standard Chartered scoops seventh place with a score of 5.04, while NatWest Group rounds out the top 10 with a performance score of 4.37.

Taken together, the UK’s lenders have endured the worst of the global health crisis well. Though sizeable challenges remain — particularly around the issue of Brexit — most banks now have an eye to the longer term and the opportunities presented by a fast-changing and post-pandemic world.

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