BARCLAYS and HSBC, the two UK banks which avoided state support at the height of the crisis, posted combined profits of £6bn for the first half of 2009, largely down to much higher investment banking returns.
In contrast, Lloyds lost £4bn, although RBS crept back into the black with a £15m pre-tax profit as it gained its own slice of the investment banking windfall.
Frustration at the depth of the public outrage occasionally burst forth from the bank bosses being pulled between contradictory demands to boost lending in the economy while repairing their battered balance sheets at the same time.
RBS boss Stephen Hester, who is on a potential £9m package to turn the ailing institution around, complained in August: “We sometimes feel as if commentators variously want us to go back to over-lending, to operate on a ‘not-for-profit’ basis, to never entertain a client and to offer employment conditions that deter the best and brightest.
“Oh yes, and at the same time to pull off a recovery enabling taxpayers to recoup the support given.”
But this support came with a heavy price from European competition watchdogs in November as heavy concessions were demanded in return for taxpayer help.
RBS must sell its Churchill and Direct Line insurance arm – parts of its investment banking business – as well as 318 branches of the former Williams & Glyn’s outlets in England and Wales and its NatWest branches in Scotland. Its share of the UK
