The Major UK banks did see a 45% rise in profits in 2012, but these were eliminated by fines and PPI re-payments says KPMG.

According to KPMG’s performance report, the combined profits last year of Barclays, HSBC, Lloyds Banking Group, RBS and Standard Chartered were £31.5 billion. This was due to better credit performance and stronger results from investment banking divisions. However these gains were ‘wiped out’ by the ‘cost of past mistakes’.

In addition to PPI costs of £7.4 billion, the banks were hit by fines and penalties from regulators of £4.7 billion and £12.8 billion accounting hit for losses caused by the revaluation of ‘own debt’.

The continuing problem of public image still dogs big banking: Bill Michael of KPMG commented: ‘In terms of their reputations, 2012 was a dire year. This is why it is so important for them to address cultural and ethical perceptions and issues. Restoring customer trust is critical.’

On the whole, the outlook is positive however: ‘Overall, banks have made progress … They have strengthened their balance sheets and made strides to bolster their capital.

‘They are becoming better able to carry out their essential function of providing support to businesses and promoting economic growth.’

Find out more about a career in banking.

Back to Top