BANKS in the UK are becoming much more optimistic than their European counterparts as the British economy starts to improve, according to a survey by accountancy firm Ernst & Young (EY).
The EY European Banking Barometer, a bi-annual study that gathers the views of senior bankers across the main European banking markets, reveals that UK institutions expect their performance to improve significantly.
British bankers also expect to increase lending to businesses and consumers, after coming in for sustained criticism for dampening the UK economy by prioritising slimming down their balance sheets over lending to corporate Britain since the banking crisis.
Omar Ali, EY's head of banking and capital markets in the UK, said: "As the wider economic recovery continues to gain pace, banks are more confident to lend to both consumers and companies alike.
"After years of tight credit restrictions, banks are now able to be more bullish in their attitudes towards lending across all sectors."
Nearly three quarters of UK respondents to EY's survey said they expect economic conditions to improve compared to 56% of respondents across Europe.
British bankers were also far more positive than their counterparts about loan growth. The UK is the only country in which bankers expect to see an increase in lending to all sectors, with smaller companies and companies in commercial real estate, healthcare, and media and telecoms sectors likely to benefit the most.
But British banks still face a number of challenges, including around pay. According to a report this weekend Edinburgh-based Royal Bank of Scotland intends to seek shareholder approval to offer top staff bonus of up to twice their salaries in bonuses. Under new European Union rules banks need investor backing if they are to award bonuses of more than 100% of salary.
This could put the part-nationalised bank in conflict with the Government.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article