Tomorrow's Business Today
The banana skin banks
A big week for the banks with potential PR banana skins all over the place.
Barclays tomorrow, HSBC on Wednesday and Lloyds on Thursday are all going to report profits that will sound huge to anyone who isn’t a City bank analyst
It will be doing so in the midst of a recession and a lingering cost of living crisis
NatWest, which went first last Friday, reported soaring profits of £6.2 billion. New CEO Paul Thwaite also said that impairments on loans were low.
Consumers and businesses are resilient, he happily noted. There are no problems as far as he is concerned
The risk here is that the bank’s data is simply out of date.
The mortgage is the last thing on which people default – as long as they have a job, they find a way to pay it.
From other areas of the economy, the news is far from good – indeed, that news suggests that NatWest and co are just flat out wrong.
Centrica has just reported an 82% leap in bad debts, even though the energy crisis was supposed to have eased.
Personal insolvency figures don’t look too clever either.
So the message from the banks – that it can afford to increase shareholder returns because all is going so well is going to grate.
If the FCA probe into motor finance mis-selling really does turn into the next PPI scandal, the banks are also looking at potentially huge fines.
What data experts say is that one problem with the banks is that they just don’t have enough reliable information about their own customers.
Amazon and my regular supermarket can probably predict what I am going to have for dinner tonight, or at least what household goods I am running out of.
My bank only knows whether I’m in the red or the black and sometimes misinterprets both situations.
A mish-mash of old computer systems have been bungled together over time leaving the banks unable to properly measure the true state of the economy.
So what the CEO gets told, and repeats back to hacks and shareholders, is always behind the curve.
It would be sensible for them to be cautious this week.
You can bet they won’t be.
Press release of the day
Which areas of the UK are seeing homes sell most above the list price? This from Getamover.co.uk, based on Zoopla data, names East Renfrewshire, East Dunbartonshire and Cambridge as the top three.
Houses in the City of London are going for less than the list price, interestingly.
Stories that will keep rolling
1) Currys takeover battle looms as JD.com eyes bid. BBC
2) Gazprom grapples with collapse in sales to Europe. FT
3) Property asking prices back on the up. Thisismoney.co.uk
4) Apple faces €500m fine over music streaming. Guardian
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