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Last Updated: Monday, 6 March 2006, 09:36 GMT
Banking on record profits
Customers inside bank
Most banks have complained of tougher UK High Street conditions
The UK's big five banks are expected to unveil combined profits of at least 32bn - more than the gross domestic product of Luxembourg - during the current reporting season.

But despite consumers' complaints that charges are rising, most financial institutions are finding that profits are coming in from overseas as activity on the UK High Street slows.

In fact, as consumers tighten their belts in the face of rising bills, many banks are having to write off higher levels of bad debts.

So how have the UK's big five fared?

To check out their performance, click on the link:


The first of the UK's big five to publish results, Barclays posted record profits of 5.28bn - despite the retail slowdown.

Barclays bank leaflets and coins
Overseas business gave Barclays a boost

Bad debts - money the group does not expect to get back - rose 44% to 1.57bn, while profits fell 19% at its credit card division as bad debts increased.

Meanwhile, on the mortgage front its Woolwich business held onto 6% of the UK market. But actual lending fell 3% in the face of increased competition.

The bank now makes 40% of its profits outside the UK.

Chief executive John Varley has said he wants the business to generate 50% of its profits abroad in future - a far cry from five years ago when it made less than 20% of its profits abroad.

But despite getting a boost from newly-purchased South African business Absa, Mr Varley is not looking for further expansion.


Pre-tax profits were steady at the UK's fifth biggest bank, rising 4% to 3.47bn.

Lloyds customer using cash machine
More Lloyds customers are struggling to pay off debts

But Lloyds TSB warned that although more High Street business was coming its way, retail banking profits fell 7% to 1.53bn as bad debts rose by a third.

Looking ahead, the UK's biggest unsecured lender also warned that the retail credit environment would get worse in the first half of 2006 before improving later in the year.

However, a better performance at the bank's corporate business helped offset the fall.

Profits at the bank's wholesale and business and international banking unit jumped 20%to 1.5bn, while profits at its insurance and investment business improved 3% to 798m.


Royal Bank of Scotland branch
RBOS plans to focus on its businesses outside the UK

A strong performance at the corporate and US consumer banking divisions of RBS helped the bank unveil a 21% surge in full year pre-tax profits to 7.94bn.

The UK's second biggest bank also revealed plans to buy back up to 1bn of its shares.

The move should mollify investors who have been concerned about its activity overseas and the value of its share price, which has been lagging behind other UK banks in the past year.

However, chief executive Sir Fred Goodwin revealed the bank would aim to focus more on overseas business - where it was now making 42% of its profits - to make it less dependent on the UK, where consumers are reining in their borrowing.


A day after RBS's results, HBOS posted a 17% jump in full year profits to 4.8bn.

Halifax branch
HBOS plans to expand its Halifax branch network in southern England

As it unveiled the results, the UK's biggest mortgage lender also announced plans for its biggest expansion programme since the 1970s.

In an effort to grab a bigger slice of the UK's retail banking market it plans to open 100 new branches by 2011.

But the bank - formed from the merger of Halifax and Bank of Scotland - still remains more exposed to the Australian and Irish markets.

HBOS profits have benefited from its overseas markets - profits at its international arm surged 50% to 610m, much bigger growth than the 8% rise to 2.2bn experienced at in its UK retail banking operations.

But the bank also followed the trend of the UK's other big name banks, revealing that bad debts had risen to 1.6bn in 2005 from 1.26bn a year earlier.


Banking giant HSBC is one of the last banks to post its results - and it has ended the reporting season with a bang and not a whimper.

It posted record-breaking annual results, with pre-tax profits of 11.5bn - up from 9.6bn last time.

The bank - which has 110 million customers in 79 countries is less reliant than most on the UK. Less than 1 in every 5 of profit is generated in Britain.

HSBC bank unveils record profits
06 Mar 06 |  Business
HBOS set to open 100 new branches
01 Mar 06 |  Business
Bad debts rising for Lloyds TSB
24 Feb 06 |  Business
Record annual profit for Barclays
21 Feb 06 |  Business
Bank giant HSBC appoints new boss
28 Nov 05 |  Business
RBS leads $3.1bn China investment
18 Aug 05 |  Business

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