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A Difficult Operating Environment Weighs On U.K. Banks' First-Half Performance As They Continue To Reposition Their Balance Sheets Aug 11
Standard & Poors, Aug 2011
Abstract
U.K. banks' and building societies' first-half financial results indicate that they are experiencing the adverse effects of a difficult operating environment, despite some signs that underlying trends are improving, in Standard & Poor's Ratings Services' view. Excluding the impact of material one-off charges, results for the banks and building societies that we rate were broadly in line with our expectations for the industry in 2011 (see 'Regulatory Change Takes Center Stage For U.K. Banks Against A Backdrop Of Continued Recovery,' published March 10, 2011). These include pressure on net interest margins from high funding costs, subdued net lending volumes, a further gradual reduction in credit loss charges, and continued steps to better manage and strengthen the balance sheet. We note,...
Companies mentioned in this report are: The Royal Bank of Scotland PLC,Nationwide Building Society,Yorkshire Building Society,Lloyds Banking Group PLC
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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