Moody's believes worst still to come for UK banking sector

Posted: Monday, 14 September 2009 @ 10:24

After my article in last month's ezine, you wouldn't expect me to be surprised by this but there seems to be a growing consensus that the worst is not yet over.

This is an extract from a report on Bloomberg:

U.K. banks are less than half way through posting 240 billion pounds ($398 billion) of losses on loans and securities, a reflection of the U.K.’s economic weakness, according to Moody’s Investors Service Ltd.

British banks are likely to record 130 billion pounds of losses in the next 12 to 18 months, in addition to 110 billion pounds lost since the beginning of the credit crisis, Moody’s said today in a report.

The company “expects the sustained weakness of the U.K. macroeconomic environment to feed through into higher loan arrears with ensuing pressure on profitability and capital,” it said.

The U.K. has provided about 1.4 trillion pounds of support to banks, becoming the biggest shareholder in Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc as it seeks to shore up capital eroded by writedowns. British banks have raised about 120 billion pounds of capital from the beginning of the credit crisis to mid-2009, Moody’s said.

Moody’s has a “base case scenario” of a 40 percent peak- to-trough decline in house prices and a 60 percent decline in commercial property from the peak, the report said.

For free advice on this topic please call us on 0845 003 5639.

Blog by Gary Pascual
Gary has been providing legal advice to shareholders, directors and business owners for over 25 years. Specialising in dispute resolution Gary is based in Birmingham with clients throughout the UK and overseas. View profile
Call Gary on +44 (0)121 778 3212 or by email
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.

Comments

  • There are no comments for this page - click here to be the first

Need legal advice for your business? We can help

Directors

Directors
Practical advice and legal support for company owners and directors.

Disputes

Disputes
In dispute with a customer or supplier? Get practical advice and support.

Your legal advisor

Your legal advisor
Board level legal advice without the costs of an in-house lawyer.

Speak to a lawyer

Speak to a lawyer
Thank you. Your response is great, very straight to the point! Hopefully this will bring an end to the matter. I will certainly be recommending your services as I am very impressed with the prompt dealing of this matter.
Janet Burbidge

Get legal updates

Enter your email address to receive our monthly Blog Newsletter


We will keep your email safe in accordance with our privacy policy.

Get the FREE definitive guide to solving business disputes

Posts by author

Speak to a lawyer

Get legal updates

Enter your email address to receive our monthly Blog Newsletter
The Law Society
Top