UK banks 'to record second-half losses'

19 August 2009

Many of the UK's high street banks will see their retail operations make losses in the second half of the year, it has been suggested.

The latest UK Banks Performance Benchmarking Survey from KPMG stated that bad loans issued by the financial institutions will impact on their performance, despite the small profits that were made in the opening six months of 2009.

Head of retail banking at KPMG's advisory practice David Sayer said that he is "slightly pessimistic" about the banks' outlook for the remainder of the year.

He told Reuters that unemployment, house prices and bad debts from credit cards and loans means "a marginal profit will become a marginal loss".

The retail arms of Barclays, Lloyds Banking Group and Royal Bank of Scotland (RBS) all recorded profits in the first half of 2009; however, weaker performance elsewhere resulted in Barclays and RBS swinging to an overall loss during the period.

Written by Asim Shah

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