We are in prime bank bashing period, a regular part of the social season this time given the added spice of the Alison Rose/Nigel Farage affair.
Farage, who never knows when he has won, wants the whole NatWest board to go, not just the CEO.
That would be destabalising for an important bank, but since he’s already done that to an entire nation, it’s small beer to him.
One thing the Farage farrago has done is to detract attention from bank profits.
Yesterday Lloyds Bank reported half year profits of knocking on £4bn.
Today Barclays offered £4.6 billion.
Tomorrow NatWest will reveal how good a CEO Alison Rose was with profits of around £3.5 billion.
Is this too much?
Well, only if you think they are ruthless profiteers. If they were, bank shares would surely be better investments than they are.
Politicians like to say that banks make too much money because there is a gap between what they pay us on savings and charge us on loans – the NIM, or net interest margin, in City speak.
The NIM at Lloyds is about 3%, which hardly looks extreme.
(Unilever’s profit on a jar of Hellmann’s is about 17% -- ruthless mayonnaise mafia that it surely is.)
In any case, those angry about banks not passing on savings increases at the same time as they put up borrowing costs assume the loans are funded by the savings.
Mostly banks go to the money markets to lend the money, where interest swap rates dictate the price, not whatever measly rate they are giving on savings accounts.
Bank profits are not where the scandal lies. Banker pay, well, that’s another story.
Maybe Nigel Farage can get into that one, but as a former banker, I’m guessing that issue doesn’t exercise him quite so much.
