Which UK bank makes the highest profits?

Which bank makes the highest profit in the UK? HSBC is the UK’s biggest bank and their profits have benefitted from the recent increase in interest rates. Interest rates have been rising in many countries boosting the profits of banks such as HSBC who have very large global businesses.

The main sources of profits for commercial banks are:

• Interest-rate spreads - i.e. charging a higher rate of interest on loans than is paid to savers
• Service fees - such as fees for arranging a new loan
• Brokerage percentages on services such as currency exchange and buying & selling stocks and shares

Not every commercial bank makes a profit. The UK challenger bank Metro Bank lost £60 million in the first six months of 2022.

It will be interesting to see how the recession impacts on bank profits in the months to come especially if there is a rise in bad debts and loan defaults from households and businesses.

Lloyds Bank for example recently announced a fall in profits and at the same time, they increased their provisions for bad debts / potential loan defaults.