Pre-Tax Profit Table

A quick look at this year's Pre-Tax Profit Table makes for uncomfortable reading. Of the 151 banks, 51 - an astonishing 1 in 3 - are loss-making. With an average profit of around £53,000,000, if one were to take out the top two banks, Barclays and HSBC who together made over £10 billion, the average profit would be (consolidations aside) - a loss!

The Fab Four

Of the 153 UK incorporated banks there are only four that have seen an increase in pre-tax profits - year on year - over the past 4 years.

They are:
Santander UK Plc
Smith & Williamson Investment Management Ltd
Standard Chartered Bank
Abbey National Treasury Services Plc

Are the well capitalised banks the biggest banks?

When it comes to lending there are good banks, there are reckless banks and then there are all those in the middle. As a shareholder one wants to see a good return on one's investment but in pushing a bank too far into unsuitable lending in the search for ever better returns one wants / needs a good capital base to weather the storms that crop up from time to time. The alternative is to plump for a bank that is well capitalised and prudent in its lending.

Interestingly, the 11 best capitalised banks (capital / assets) are all in the bottom 50 in terms of total assets, suggesting that biggest isn't always best.

The eleven are:
1. China Construction Bank (London) Ltd
2. Melli Bank Plc
3. Bank of the Philippine Islands (Europe) Plc
4. Metro Bank Plc
5. European Islamic Investment Bank Plc
6. C I T Bank Ltd
7. Allied Bank Philippines (UK) Plc
8. Bank Saderat Plc
9. Macquarie Bank International Ltd
10. Gatehouse Bank Plc
11. A N Z Bank (Europe) Ltd

OneSavings Bank Plc

OneSavings Bank Plc is the new kid on the block in the new 2011/12 edition of Bank League Tables. One Savings Bank used to be Kent Reliance Building Society and now trades as Kent Reliance. We have lost Liverpool Victoria Banking Services Ltd and Capital One Bank (Europe) Plc. The Hardware Federation Finance Co Ltd has changed its name to BIRA Finance Ltd, and Kleinworth Benson Private Bank Ltd has dropped the "Private".