MD writes...

To no one's great surprise the banks, whilst delivering solid numbers (HSBC on Monday, HBOS on Wednesday, RBS yesterday (04/08/05), are raising provisions significantly - and this in a still benign environment. Alliance and Leicester delivered flat profits; and Northern Rock is I suspect anything but - particularly as it has chased market share.

Elsewhere, Lloyds TSB delivered it's usual uninspiring fare. Philip Hampton, former Lloyds Finance Director, could not resist a dig in a 31 July interview in the Sunday Telegraph:

"When I joined, Lloyds TSB was the biggest bank in the world. It's now the fifth biggest in the UK. I didn't enjoy it, and I don't think they enjoyed it either...I think the company needs radical change. It's still got the largest UK current account share at 22 percent or so. But they sold all the international businesses...It's got no growth prospects and no plan to address the lack of growth prospects."
My thoughts exactly - I could never understand why they sold the NZ bank. It had a great franchise, great ROE etc. As far as I can see they've shrunk the bank so that some rich US or European Bank can waltz in and take over a strong UK franchise...allowing Chief Executive Eric Daniels et al to go off with fat payoffs.

Still, HMG might always intervene in such an event and prevent any takeover à la Bank of Italy.

On second thoughts, fat chance of that.

NB: Author owns / beneficially owns shares in HSBC

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