Chancellor to meet with Lloyds, Barclays and Natwest executives over share slumps
Chancellor Jeremy Hunt is convening a summit with bosses from the UK’s largest banks to discuss concerns that their poor share performance is preventing more lending into the economy.
Senior executives from Lloyds, Barclays, Natwest, HSBC and Santander UK have been called to meet with Hunt next Tuesday, Morning Wire understands.
News of the meeting, first reported by Sky, comes as the UK’s big banks prepare to release their fourth-quarter results in the coming weeks.
Their earnings are expected to be hit by high interest rates and fierce competition for deposits and mortgages.
Franck Petitgas, a former Morgan Stanley executive and Rishi Sunak’s chief business adviser, reportedly arranged the meeting to stress that share price weakness is inhibiting economic growth and banks’ lending to businesses and households.
An unnamed executive told Sky that the meeting had been convened to discuss how the government could help shore up confidence in the banking sector so that it could improve lending into the economy.
The Chancellor last week met with City grandees as part of the government’s efforts to attract more listings to the London Stock Exchange, which is struggling with a dearth of activity.
Banks’ share prices have suffered over the last 12 months as they struggle with economic turmoil and a series of scandals.
Natwest’s stock, around 37 per cent of which is owned by the government, has cratered nearly a third in the last year over worse-than-expected earnings and a “debanking” row with former UKIP leader Nigel Farage.
HSBC is the only Big Four bank to see its stock rise in London during the same period, with the firm doing much of its business in Asia. However, shares have only ticked up 0.2 per cent.
“We continue to engage with the sector to find new and better ways to unlock growth across the whole of the UK,” a Treasury spokesperson told Morning Wire
“Already our Mansion House and Edinburgh reforms are encouraging growth in the UK’s capital markets, streamlining the listings process, cementing the UK’s status as a leading global capital markets destination and unlocking £75bn in equity funding to help businesses scale up.
“And with the introduction of permanent full expensing, the biggest business tax cut in modern British history worth over £50bn over the next five years, companies can now invest for less in the UK.”
None of the five banks provided a comment on the upcoming meeting when approached by Morning Wire