UK banks results roundup – are they undervalued?

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As the UK’s largest banks finish up their latest season of results, we look at how they performed, pick out some key themes and look at what’s next.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Published on 9 November 2023

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

If we look on a year-over-year basis, then broadly speaking there’s a positive trend in performance across major UK banks. As interest rates have risen throughout major economies, banks have been able to make higher returns on their traditional lending operations.

However, when we look at quarter-on-quarter performance, it paints a very different picture. It looks like central banks might have reached peak rates, or at least close to being there. That means the benefits from higher rates are expected to have capped off – and that’s showing through in the results.

Source: company financial statements, 03/11/23. Income includes interest income, non-interest income and other operating income where appropriate. Profit is represented by underlying profit before tax, in the case of HSBC ‘notable items’, which had a big