FTSE 100 lenders pocket record total profit
Standard Chartered was the last of the FTSE 100’s biggest banks to release its annual results, as analysts praised the strong performance across all of the Big Five.
Barclays, HSBC, Natwest, Lloyds and Standard Chartered booked an all-time high of £50.3bn in profit in 2024 and returned £35bn to investors.
Russ Mould, investment director at AJ Bell, said: “[Standard Chartered] rounds out a bumper set of full-year results from the FTSE 100’s Big Five banks which are running like cash machines right now, in terms of how much they earn and how much they are returning to their shareholders.”
He added: “Encouraged by ongoing cost-efficiency programmes, the absence of an economic downturn, modest loan losses and buoyant financial markets, analysts now expect further modest increases in 2025 and 2026.”
Standard Chartered and Lloyds were the only banks to narrowly miss analyst estimates, with the latter offset by potential motor finance payouts.
Lloyds’ combined reserves for the car finance scandal now tops £1.1bn, yet the lender still enjoyed a shares jump following Thursday’s results.
All five banks announced buyback schemes which reach a total value of £5.5bn for 2025.
Banks overhaul executive pay
In its results, Standard Chartered announced an overhaul on executives’ pay, following suit with HSBC which instigated the changes after the removal of the bonus cap for bankers last year.
HSBC’s results also reemphasised new boss Georges Elhedery’s mission on slashing costs, as it committed to an annualised decrease of £1.2bn by the end of 2026.
The FTSE 350 Banks index climbed over 60 per cent in the last year, becoming the second-best performing sector index out of the 39 sub-groups.
Dan Cooper, UK banking and capital markets leader at EY, told Morning Wire: “Looking out across 2025, banking leaders remain cautiously optimistic.
“Net interest income is expected to see further growth over the course of this year, supported by a rise in demand for consumer credit and easing margin pressures.
“In addition, fee income is expected to increase over 2025, as banks place greater emphasis on expanding capital-light revenue streams.”
However, Mould highlighted that despite the “strong run” banks were “no longer as cheap as they were”.
“The dividend yields, and total cash yield including buybacks, may still be attractive, but their valuations on the basis of historic net asset, or book, value are now less eye-catching.”