Optimism gets mugged in the dark alley of reality. UK banks, especially the retail ones, are still in trouble.
LONDON (Reuters) - Britain's banks are likely to see their battered retail arms slide to a loss in the second half of 2009, as the cost of bad loans, tough competition and wholesale funding continues to weigh, a survey by accountants KPMG found.
"Retail banking is just profitable at lower levels, but with rising impairments. It seems probable that it will fall into loss making in the second half of this year," KMPG said in its UK Banks Performance Benchmarking Survey on Wednesday.
David Sayer, head of retail banking for KPMG's advisory practice, said he was "slightly pessimistic" about the second half, though banks' retail losses could reverse in early 2010.
"It's not a catastrophic shift, but if you are slightly pessimistic on house prices, if you believe there is a lagged effect on unemployment, and therefore you believe bad debts on credit cards and personal loans will rise, then you believe a marginal profit will become a marginal loss," he said.
9 comments:
I DONT BELIEVE THIS
HOW CAN YOU NOT MAKE MONEY BORROWING AT NEARLY 0% AND LEND IT AT 5%.
THIS FACT SHOULD BE EARNING THEM A FORTUNE, BUT ARE THE BANKERS HIDING THE MONEY, UNTIL AFTER ANY CONTROLS ON WAGES, ON BONUSES END?
If the banks were not facing substantial losses then it wouldn't have been much of a crisis, n'est ce pas !
So not much surprise really.
Here is one for you Alice. Hat tip Denninger.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6807490.ece
If the Banks are supporting the price of houses, buy setting up subsidiaries to sell their rotten assets to at fantasy prices, should people who think the housing market is rebounding be warned?
If the recession becomes a depression you could watch the bottom of the housing market simply drop into a black hole.
A bit like one of those new builds that turns out to have been built over an old mine shaft, one minute you are looking at your lovely green lawn, the next poof! there is a stonking great big hole in your garden.
Buyer beware.
If the Banks are supporting the price of houses, buy setting up subsidiaries to sell their rotten assets to at
The Danish banks have made a shared "property management" business ... unfortunately privately held so one cannot short the sucker.
Nationwide house prices up 1.6% in todays release, well ahead of expectations. Good news eh Alice?
What's supporting it,anon @ 10.21 ?
The 5 million long term unemployed ? Those on frozen or cut wages ? Those worried about their jobs in one of our major sectors ?
If public sector workers aren't worried then they bloody well should be.
As we know the entire world suffer from economic crisis. In this aspect bank role is very important to regain our economic growth. By supporting the price of houses, buy setting up subsidiaries to sell their rotten assets to at fantasy prices, should people who think the housing market is rebounding be warned?
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