UK Bank Profits Rise

Banks Make Profit Despite Credit Crunch.

Despite having to write off bad debts in an unprecedented large scale, British banks have proved adept at maintaining what they do best - making profit. British banks made £3.8billion profits in last 12 months.

The Banks have used the credit crunch as an opportunity to increase bank charges on credit cards, mortgages. The result is that underlying profitability has continued to rise.

For example, HSBC, posted a 28% drop in global profits in its latest results, yet its UK personal-banking division was up 85% to £605m. For example, Over the past 12 months HSBC has increased the cost of its two-year fix for borrowers with 25% equity in their home by half a percentage point, from 6.34% in July 2007 to 6.84% . This amounts to an extra £62 a month on a £200,000 loan, or £1,505 over the two-year period.

The Royal Bank of Scotland also increased its operating profits by 9% and said it found the UK mortgage industry increasingly attractive and was trying to increase its market share here.

Times article
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