A relatively quiet April in the Banking sector, with the main stories that caught our attention being some positive Q1 2021 results and the beginning of the claw backs for Covid lending.
As has been a common theme in the last few months, more organisations announced return to work plans, which is high on our clients’ agendas. With this in mind, we’re hosting an online roundtable discussion in May on the future Ways of Working in the Banking sector. If this is something you’d be interested in hearing more about then do get in touch.
Q1 2021 results
- Only 2 months ago the UK high street banks announced 2020 results, allowing us to be cautiously optimistic about the prospects of a better 2021.
- In the last week of April the banks first quarter results continued on this trend, with a significant jump in profits for most (see LBG, Santander, HSBC, Barclays, Natwest).
- A significant contributor to this lower than expected losses from bad loan provisioning, as well as a booming housing market which doesn’t show signs of slowing.
- We are also seeing these organisations move quickly with implementing longer term changes to reduce costs - Santander announcing the closure of 111 branches and HSBC the latest to announce workspace consolidation.
- These results weren’t unexpected as the economy eases out of the lockdown, but expect this to level out over time, particularly as government support is taken away and continued low interest rates.
Covid loan claw back
- Emergency loans backed by the government have led to the provision of over £180bn since March 2020.
- However, with CBILS and BBLS now closed for applications, lenders have kicked off the process to collect repayments now that the 1 year interest free period is up.
- And despite the new government backed Covid Recovery Loans, it is expected that a number of companies will struggle to make these repayments as the economy is still opening up.
- As a result, banks will be scaling up collections and recoveries activity rapidly to ensure a robust process and fair outcomes for all, with a number of banks arranging sensitivity training for debt collectors to help manage the fallout.
And in case you missed it…
- This month, Oxbury bank launched their Forest Saver – the first personal and savings account that directs savers interest to plant trees.
- A number of the world’s biggest banks signed up to the Net-Zero Banking Alliance, targeting to have lending and investment portfolios with net-zero emissions by 2050.
- Revolut have taken flexible working to another level by allowing employees to work from abroad for up to 60 days a year.
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