The Top 1000 World Banks ranking reveals that UK banks have had a solid – if unremarkable – year, with RBS heading a field that enjoyed decent asset quality and soundness. 

In 2019, the UK economy registered anaemic gross domestic product growth of about 1.4%, according to the Office for National Statistics. But for the banking sector, this environment was enough to keep the system as a whole ticking along in relatively good health.

In general, profitability levels remained steady, if unremarkable, while most banks continued to make the requisite investments to cut their operating costs. In terms of the UK’s best-performing banks, RBS tops the table of the 10 largest institutions. Its score of 6.35 out of a possible 10 points is buttressed by market-leading outcomes with respect to its profitability, operational efficiency and return on risk. The bank’s soundness ranking, where it takes eighth position, is its weakest outcome in terms of the constituent best-performing metrics. 

HSBC and Barclays, the UK’s largest and second largest banks by Tier 1 capital, are in fourth and third positions, respectively, in the best-performing banks ranking. HSBC’s score of 5.79 was helped by a strong showing in terms of liquidity, in which metric it is table topping, as well as coming in fourth for operational efficiency.

Barclays, meanwhile, is particularly strong in relation to its return on risk numbers, placing second. It is also third in the growth and profitability tables, pointing to a strong all-round performance for the bank. 

Elsewhere, Yorkshire Building Society and Nationwide Building Society secure fifth and sixth positions, respectively, in the best-performing banks ranking. Though both institutions registered lower growth figures than most of their peers, they are among the leading lights for asset quality and soundness. Yorkshire Building Society, for instance, has the top spot in the country based on asset quality, while Nationwide is third. Similarly, both feature among the top five institutions based on their soundness ranking. 

Lloyds Banking Group, the fourth largest UK bank by Tier 1 capital, is eighth among the best-performing banks. Notably, the lender is second best in terms of its operational efficiency rank, pointing to the success it has achieved in the implementation of its strategy to transform and digitise.

Looking ahead, the British banking sector is in a relatively good position to handle the economic challenges associated with the Covid-19 pandemic. Though profitability, as well as asset quality levels, are likely to take a hit in the coming year, most banks should be able to shoulder these challenges, and others, as they enter a new decade.


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