Lloyds, HSBC, Barclays and NatWest rake in £44bn as borrowers hit by rate hikes
Britain's Big Four banks were blasted for raking in a combined £44billion profit bonanza while penalising borrowers and closing hundreds of branches.
Lloyds Banking Group was the last to report its annual results as it today revealed it made a record £7.5billion last year - a more than 50% leap on 2022. That was despite setting aside £450million for a potential car finance misselling scandal.
It followed bumper results from Barclays, NatWest and HSBC over the past week. Bosses at the four were also laughing all the way to the bank. Lloyds’ boss Charlie Nunn netted £3.7million while the head of HSBC, Noel Quinn, saw his pay and perks package double to £10.6million.
The huge profits were driven by a surge in interest rates which have fattened banks’ coffers but left borrowers reeling. Lloyds net interest margin - the difference between what it pays savers and charges borrowers - rose from 2.94% to 3.11% last year.
Lenders have also begun upping mortgage rates in recent days, despite the Bank of England’s base rate remaining at 5.25%. HSBC, which this week announced profits globally soared from £13.5billion to £24billion, will increase mortgage rates across the board from tomorrow (Friday).
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The TUC claimed the Tories had further boosted banks by cutting an industry levy. TUC General Secretary Paul Nowak said: “These eye-watering profits will be met with disbelief – especially when millions are struggling to make ends meet.
“The Government has allowed banks to cash in on sky-high interest rates and to benefit from people’s mortgage misery. Rishi Sunak’s decision to slash the banking surcharge has been a huge gift to the City. Instead of fixing our crumbling schools and hospitals the PM has handed banks a monster tax break. This is an act of folly.”
The jump in profits comes as banks press ahead with branch closures, leaving many customers who rely on cash at risk of being stranded. Lloyds Banking Group, the UK’s largest retail network, closed 153 shuttered another 153 last year. Barclays, which made profits of £6.6billiion globally in 2023, closed 175 UK branches.
Group chief executive CS Venkatakrishnan, also known as Venkat, got £4.6million in pay and bonuses for 2023. HSBC closed 108 branches last year. Another six are due to shut but HSBC has pledged not to close any more this year.
Its UK profits jumped from £3.6billion to £6.7billion last year. NatWest Group made profits of £6.2billion last year, the highest since before the 2008 financial crisis. Paul Thwaite, who was NatWest’s interim chief executive from last summer and is now its permanent boss, got £2.4million in 2023.
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