UK Banks: Performance Benchmarking Report
Full Year Results 2012
Basis of preparation This report summarises the 2012 full year results of Barclays, HSBC, Lloyds Banking Group (Lloyds), Royal Bank of Scotland (RBS) and Standard Chartered1. Whilst progressively more information has been given in results announcements in recent years, not all statutory accounts or Pillar 3 reports have been published at the date of this report, and therefore analysis is constrained in certain respects. Where total numbers are presented it is the total of the ﬁve banks in the review. As an example, total assets is the sum of the total assets of the ﬁve banks, expressed in sterling. Similarly, if an average number is presented, it is the average of the ﬁve banks in the review. We have used simple headline numbers in our analysis unless stated otherwise; each bank has its own way of reporting performance and this has proved to be the most consistent method of presenting their results. HSBC and Standard Chartered present their results in US dollars ($). These have been translated into sterling using the relevant period end or period average rate. Where percentage changes are presented for HSBC or Standard Chartered, these percentages are based on the dollar amounts disclosed by the banks, rather than on the sterling translation of those amounts. Note that any discussion of ’underlying’ results (or, in the case of Lloyds, of ‘management basis’) reﬂects a number of adjustments to statutory ﬁgures, as determined by management. Underlying results will therefore not be comparable from bank to bank. Management reporting in the bank results focuses on underlying ﬁgures. Adjustments commonly include:
gains and losses
losses on acquisitions and disposals of subsidiaries and businesses
or fair value changes on own debt
and jointly controlled entities within underlying non-interest income
1. The ‘Focus on UK retail banking’ section also includes the results of Clydesdale Bank, Nationwide Building Society and Santander.
© 2013 KPMG LLP a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member ﬁrm of the KPMG , network of independent member ﬁrms afﬁliated with KPMG International Cooperative, a Swiss entity. All rights reserved.
Chapter 1 Chapter 2 Chapter 3 At a glance Summary Financial performance Proﬁtability Bank cost cutting has barely scratched the surface Sector commentary Focus on UK retail banking Investment banking insights Investment banking – towards a new industry model Derivatives market shakeup starts to settle Restoring customer trust Real cultural change demands more than lip service Conduct counts Fighting ﬁnancial crime comes at a cost IT security under new attack Financial position Balance sheet Non-core disposals gather pace Asset quality Capital adequacy Funding The future landscape 2013 Economic outlook: another disappointment or a sustained recovery? Banking outlook 1 2 4 4 15 17 17 22 27 29 31 31 33 35 37 39 39 43 45 49 51 53 53 55
© 2013 KPMG LLP a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member ﬁrm of the KPMG network of independent member ﬁrms afﬁliated with KPMG International Cooperative, a Swiss entity. , All rights reserved. Printed in the United Kingdom. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks or trademarks of KPM G International.
1 UK Banks: Performance Benchmarking Report | Full Year Results 2012
At a glance
Barclays 2011 2012 20112 RBS 2012 Lloyds 2011 2012 HSBC1 2011 2012 Std. Chtrd.1 2011 2012
Ranking By pro ts before tax By total assets By net assets Statutory pro t before tax (£ million) Net interest margin (basis points) Cost to income ratio3 Impairment charge (£ million) Return on equity4 Impaired loans to loans and advances to customers Impairment cover...