Bank giants widen gap with state aid rivals

Nov 11 2009 by Peter McCusker, The Journal

BANKING giants HSBC and Barclays unveiled stronger underlying profits so far this year as the gulf widens with their beleaguered taxpayer-supported counterparts.

Barclays said a third-quarter haul of £1.5bn helped profits more than double in the first nine months on an adjusted basis, while HSBC reported results “significantly ahead“ in the quarter to September 30.

The pair, which have avoided turning to the Government for state aid, gave hope that bad debts among recession-hit borrowers were starting to level off as they reported sharp quarter-on-quarter falls in impairment charges.

Barclays reported £4.54bn in profits for the first nine months of the year - down by nearly a fifth against a year earlier.

But the group said the result more than doubled on an underlying basis as it had enjoyed “consistent profitability“ so far in 2009.

HSBC added that, on a reported basis, its third-quarter figures were lower than a year earlier, with both banks being impacted by tightening in credit market spreads.

However, it too posted improving underlying figures as the two banking heavyweights began to put the troubles of last year’s financial crisis behind them.

Concerns are mounting that the better results will see the return of excessive bank bonuses.

But Barclays and HSBC sought to assure that decisions have yet to be made on full-year payouts and will take current fears into account.