British banks dropping down international rankings

A new report has revealed that UK banks are failing to keep pace with their international rivals after seeing their profits slip by more than a fifth.

According to The Banker’s latest ranking of the Top 1,000 banks, Britain’s industry heavyweights have seen their combined profits drop by 22 per cent between last year and this year.

This performance stands in sharp contrast to their French counterparts who have boosted their financial performance by 30 per cent.

The study said the UK fall was driven by a “weak performance” from Barclays and Edinburgh-based Royal Bank of Scotland (RBS).

It also warned the outlook for UK banks looked “even more uncertain“following the vote to leave the European Union.

And it said Britain’s banks now provided 2.6 per cent of world banking profits, compared with 10 per cent a decade ago, while China had seen its contribution soar – stepping up from 4 per cent to 32 per cent over the past 10 years.

Brian Caplen, editor of The Banker, said: “While the advent of ‘challenger banks’ is a healthy sign, they are still very small.

“The real story of UK banks this year is restructuring, downsizing and falls in profits.

“They are much less significant in global terms than before the global financial crisis.”

The research revealed that HSBC, which was the world’s second largest bank 10 years ago, was now the only British bank in the global top 10, placing ninth.

RBS has lost money for eight years on the trot, falling from third place in 2008 to 19th this year.

Barclays slipped from 13th to 17th, while challenger banks Metro and Sainsbury’s Bank reached 969th and 803rd respectively.

The Banker added that losses at RBS and Standard Chartered, coupled with profit falls at Barclays and Lloyds, helped trigger the first drop in UK bank profits since 2013.