UK banks are preparing to reassure households and businesses of their resilience and support as fresh tariffs signal a “watershed” moment for the global economy, according to financial experts.
Some of the country’s biggest high street lenders are set to publish their latest financial results next week, offering crucial insight into their strategies amid rising global uncertainty. The updates come at a pivotal time, with new tariffs announced by former US President Donald Trump earlier this month expected to disrupt trade flows and weigh heavily on economic growth worldwide.
The International Monetary Fund (IMF) warned this week that the global trade environment had entered a “new era”, with levels of uncertainty reaching “unprecedented” heights.
While the forthcoming banking results will cover the first three months of 2025 — prior to the key tariff announcements — lenders are expected to address how they are preparing to navigate the turbulent conditions.
Peter Rothwell, head of banking at KPMG UK, said the country’s banks are likely to “emphasise their commitment to the UK, to retail and business customers”.
“I think you’ll hear banks saying there’s no reason to believe it’s not manageable, and they’re willing to lean in to help limit the impact as far as possible,” Mr Rothwell said. “It’s too early to tell exactly what the outcome will be, but they are remaining attentive, focused, and ready to support where needed.”
This could see major lenders stepping up their financial backing for businesses in need, at a time when more cautious players might scale back. Mr Rothwell described the current environment as a “watershed” moment for the economy, noting: “There are as many opportunities as there are threats.”
The quarterly reporting season will begin with HSBC on Tuesday, followed by Barclays and Santander on Wednesday, Lloyds Banking Group on Thursday, and NatWest Group rounding out the week on Friday.
Investor attention will be particularly drawn to HSBC and Barclays, along with Standard Chartered, all of which have significant exposure to global markets and are therefore more vulnerable to international trade tensions.
Analysts at AJ Bell said investors would be scrutinising HSBC’s results closely for any commentary on its Asia operations — which accounted for three-quarters of its total pre-tax profit last year — given the potential knock-on effects of tariffs on China.
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The results could also shed light on the turbulence seen recently across financial markets, which has already impacted investment banking and trading divisions. According to Mr Rothwell, advisory services such as mergers and acquisitions remain “challenged by market conditions”, with the recent bout of volatility causing a degree of “paralysis” in deal-making.
Among high street lenders, Lloyds Banking Group is expected to post a modest dip in its first-quarter pre-tax profits, falling to £1.5 billion from £1.6 billion a year ago. The bank has also faced pressure from a separate issue, having set aside £1.2 billion to cover potential compensation costs linked to motor finance commission arrangements, which weighed heavily on its full-year earnings.
Nevertheless, despite the uncertainties, there remains cautious optimism within the banking sector. Many lenders are expected to underline their robust capital positions and stress-testing capabilities, highlighting their readiness to weather any economic storms.
As UK households and businesses brace for the potential fallout from escalating trade tensions, the banking sector’s message of stability and support will be keenly watched in the days ahead. Investors, policymakers and the public alike will be hoping that the sector’s confidence is well-founded as Britain navigates the next chapter of a rapidly shifting global economic landscape.
