Reporting season is upon us as the Directors of banks queue up to annouce first-half results for 2009, some with smiles on their faces and others wishing they hadn’t got out of bed. But could growth elsewhere provide a glimmer of hope?
Barclays and HSBC started the week on a positive note reporting combined profits of almost £6bn, commentators were quick to point out that this will probably lead to big bonueses for staff at the two banks, particularly for the 20,000+ employees at Barclays.
Monday passed and Tuesday dawned, the morning news started to report more results, this time it was for state-owned Northern Rock, a lender which the taxpayer has quite an interest in. The results matched the this summer’s weather; it was bleak. With a six month loss of £724m, the Rock’s plans to return to the private sector are questionable, which is probably why they are yet to annouce a timetable for the big move.
The worst was still to come. HBOS’ bad debt plunged part state-owned Lloyds Banking Group into £4bn of losses, as announced on Wednesday. But the Board are successfully managing the short-term issues and are well positioned to outperform over the medium term, providing value to our customers and shareholders, according to Chief Executive Eric Daniels. Cost-cutting measures include cutting 9,000 jobs and paying no dividend this year, and when cosidered alongside their commitment to lending an additional £14bn by next March it is clear that Lloyds are trying to get ‘their house in order’ and stimulate the economy by lending, so could this just be a short-term glitch while they deal with HBOS?
The Guardian brightened up the headlines though on Wednesday, with a report into research that shows the service sector to be growing and indicating that this may be a sign that we are beginning to come out of the recession. This compliments news on a good preformance from sterling against the dollar and increased activity from carmakers.
Some good news, some bad news and some ugly news certainly makes a better reading than the recent flood of all ugly news – could this finally be a step in the right direction for the UK? In no way do I think that we are out of the recession, or indeed entering the final stages, but we may be on the right track.
It will be interesting to see how much progress is made over the next 6 months as the general election looms and the financial crisis remains high on manifestos, could Labour actually make a big enough difference to escape the inevitable Tory victory?