After a strong performance across the board in 2024, this year has been slightly less uniform for the UK’s Big Four high-street banks.

First to report was global bank HSBC (HSBA), which put in a good showing with underlying revenue and earnings increasing thanks mainly to its Asia-based wealth management operations, although its trading desks also made hay during the market turmoil.

The group maintained its banking net interest income guidance for the full year and announced it would buy back another $3 billion worth of shares, having only just completed its previous $2 billion buyback.

Next up was Barclays (BARC), which posted better-than-expected earnings, raised its full-year outlook and confirmed it would return £10 billion or almost a quarter of its market cap to shareholders in the form of dividends and share buybacks, with a preference for the latter.

The only UK lender with an investment bank capable of taking on Wall Street titans like Goldman Sachs (GS:NYSE) and Bank of America (BAC:NYSE), Barclays reaped the benefit of increased stock market volatility with outsized gains from its bond and currency trading operations.

It also benefited from strong demand for loans and mortgages in the UK, raising its full-year net interest income target by £300 million to £12.5 billion.

It was a less successful reporting season for the UK’s largest mortgage lender Lloyds (LLOY), which reported a 13% drop in underlying profit due to higher operating costs and increased impairment charges which more than offset an improvement in the net interest margin.

Costs rose 6% reflecting inflationary pressures and business growth, together with higher severance costs, while provisions for bad loans swelled from £57 million to £309 million.

On a positive note, the bank didn’t increase its provisions for motor finance commissions, which currently stand at £1.15 billion after it put aside £450 million in 2023 and another £700 million last year.

Saving the best till last, NatWest (NWG) delivered first-quarter operating profit no less than 18% above the consensus thanks to a combination of strong mortgage demand, a better net interest margin and gains at its investment banking business.

NatWest also surprised with its cost-to-income ratio, which dropped to 48.6% from 58.4% a year ago and makes it the leanest of the Big Four, although it maintained its estimate of full-year running costs meaning there was little room for analysts to tweak their forecasts.

That said, the bank raised its total income and return on tangible equity targets to the top of their respective ranges sending the shares to a 14-year high briefly. 

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