Tariffs to take focus as HSBC and Barclays kick off FTSE 100 bank results
First-quarter results season is around the corner for the UK’s major banks, with HSBC and Barclays set to report at the end of the month.
Whilst President Donald Trump launched his tariff onslaught at the beginning of April – narrowly missing the first reporting period of the year – lenders are expected to factor the fallout into their future outlook.
Jason Napier, head of banks at UBS, said: “We expect the first quarter UK bank earnings season to be characterised by solid numbers and investors who are entirely focused on the outlook for post tariff trading.
“We see the UK as relatively insulated against policy rate downsides (higher rates, hedges, lower tariffs), and with lenders possessing good cost control and credit quality, and some potential for a more constructive policy backdrop.”
FTSE 100 lenders have suffered some of the biggest blows as the tariff saga unfolded.
The FTSE 350 bank index plunged to a low of 4,700.07 as the global trade war ramped up. This marked a near 1,000 point drop from 5,645.28 ahead of Trump’s ‘Liberation Day’ levies.
HSBC, Barclays and Standard Chartered stock dropped ‘too far’
Losses saw lenders reverse their year-to-date gains.
Despite soaring over ten per cent on Thursday after Trump rolled back tariffs, Barclays returned broadly in line to where it began the year – near 270p.
HSBC made gains of nearly six per cent Thursday morning, but was down nearly four per cent from the start of the year.
However, UBS analysis said stock declines in Barclays, Standard Chartered and HSBC had fallen 13-18 per cent “too far”.
The three lenders have been the most exposed to the impact of tariffs.
HSBC and Standard Chartered have significant operations in Asia, which have been hit with the steepest levies. Barclays’ investment bank is tied to market activity and investor volatility resulted in the shares taking a hit.
However, Napier said Barclays was the “top capital market play in Europe” due to its stronger balance between trading and advisory than its European peers.
He added: “How low policy rates go and how long they stay there are the key questions”.
The FTSE 100’s ‘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.