Bank bosses brace for interrogation in FTSE 100 lenders’ earnings season
Britain’s banking heavyweights are gearing up to report full-year earnings with top bosses set to face the crunch on the progress of their overhaul strategies.
Lloyds chief Charlie Nunn will be the first of the City’s top bankers to go under the microscope when the FTSE 100 giant releases its annual report on 29 January.
Nunn took the helm at Lloyds in August 2021 and at the end of his first financial year laid out his mission statement. The former head of wealth and personal banking at HSBC sought to bring a flavour of his old role to the UK’s biggest mortgage lender in a bid to diversify income streams.
Expanding Lloyds mass affluent range became one of Nunn’s defining missions including increasing high net worth client’s total holdings with the banks – everything from savings to pensions and investments – by over ten per cent.
The fight to claw out a market share in wealth management has ramped up among the City banks with HSBC splashing $5m on its new London wealth centre last summer.
But Lloyds efforts have faced blows with Jo Harris – the executive behind the bank’s mass affluent push – quitting within days of the division’s launch.
The bank has ploughed forward with its ambitions, taking control of the remaining half of its personal wealth tie-up with Schroders’.
Also under interrogation will be Nunn’s ability to keep a lid on costs. In 2022, the bank said it would achieve a cost-to-income ratio of under 50 per cent – a transformation that would mark a major improvement in the lender’s profitability after Nunn inherited the bank at an uneasy 57 per cent.
Lloyds and HSBC tear down costs
Lloyds’ is not alone in its war on costs with simplification the main driver among FTSE 100 peers Barclays, Natwest and HSBC.
“The Big Four, domestic, FTSE 100 banks all have broadly similar strategies: cut costs, digitise, and stick to what they are good at, to manage risk and optimise returns on equity,” Russ Mould, investment director at AJ Bell, told CityAM.
HSBC’s Georges Elhedry sensationally took to the top post in September 2024 and wasted no time in shaking up Europe’s largest lender.
Elhedery pledged annualised cost reductions of $1.5bn as part of his reshaping of the bank to focus on high-performing markets, particularly in Asia.
Still, both HSBC and Lloyds have been forced to defend their plans amid major disruptions.
Lloyds shares faced whiplash amid the back-and-forth of the motor finance scandal as the bank racked up nearly £2bn in provisions causing profit to plunge 40 per cent in the fourth quarter. Meanwhile, HSBC’s $14bn play to take control of Hang Seng bank spooked investors after it revealed plans to suspend its buyback program in order to complete the purchase.
Despite these hits HSBC is up near 49 per cent in the last year and Lloyds over 70 per cent.
“Lloyds and HSBC remain solid, execution-led stories with clear capital return appeal,” William Howlett, financials analyst at Quilter Cheviot, told CityAM.
He added boards would “likely judge chief executives on strategic follow-through rather than short-term market noise”.
Natwest and Barclays open revenue streams
Alternatively, the looming battle for dominance between Natwest and Barclays lies in the art of diversification.
“Natwest’s challenge is to reduce its heavy reliance on net interest income and broaden revenue streams under new leadership,” Howlett said.
Since its return to full private ownership in May 2025, Natwest has sought to beef up its revenue streams beyond interest rates, which has included the integration of Sainsbury’s Bank, a challenger the bank purchased for £125m.
Meanwhile, Barclays chief CS Venkatakrishnan may find himself as the most vocal ally to Chancellor Rachel Reeves in her quest for a London listing revival.
The American banker, universally known as Venkat, has spearheaded a total revamp of the lender’s investment banking division with a headline pledge to slash its share of group risk-weighted assets from 58 per cent to a leaner 50 per cent by 2026.
Barclays faces a “low multiple” slapped on its stock due to dislike for the unpredictability of its investment arm, Mould said, with the powerhouse division contributing a 48 per cent share of the bank’s first-half revenue at £7.1bn.
But a flurry of new company listings – as hoped for by both the Treasury and City officials – may mark the perfect catalyst for this strategy, providing a massive fee for the bank’s expertise without forcing the bank’s hand to reserve safety capital.
Mould added investment banking fees could be a major driver of bank’s success in the coming year “if markets stay buoyant or go higher still”.
Fresh tariff threat
Wall Street’s banking giants capped a historic 2025 with record-breaking revenues, driven by a year-long market frenzy.
Goldman Sachs led the fourth-quarter surge, pocketing $4.31bnin equities trading revenue – an all-time Wall Street record for any single quarter.
But focus was stolen by remarks from the US’ banking chiefs after the latest escalation in geopolitical and domestic tensions from President Donald Trump.
As Trump ramped up his attacks on the Federal Reserve’s chair Jerome Powell, JP Morgan chief Jamie Dimon came to the central banker’s defence.
Dimon said anything that “chips away” at the Fed’s independence was “not a great idea,” which sparked quick reaction from the President who accused Dimon of wanting “higher rates” to make “more money that way”.
In London, the City may be awaiting similar remarks from bank bosses, who are set to feel the pressures from Trump’s latest tariff salvo.
The President announced a 10 per cent tariff on the United Kingdom and seven other European nations from 1 February 2026 due to their staunch defence of Greenland’s sovereignty.
Barclays is among lenders already feeling the sting from Trump policy after the bank’s stock slid five per cent on the news the President would cap credit card interest rates at 10 per cent.
After Trump announced his sweeping ‘Liberation Day’ levies last year, banks across the board hiked their provisions for bad loans as they braced for shockwaves across the economy.
While bank bosses may have hoped to show overhaul strategies gathering pace, ‘Liberation Day 2.0’ threatens to steal the earnings season spotlight with a costly curveball.