Banco Santander SA also beat
on Wednesday, though it acknowledged that the economy was set to “remain challenging.” Banco Bilbao Vizcaya Argentaria SA meanwhile saw net profit climb 30% from a year earlier.British lenders all lowered their expectations for the economy in the coming year. Their models aren’t perfect predictors — they’d penciled in almost no growth in the housing market for last year, when prices ultimately rose by double digits — but the figures do reflect concerns about the financial health of borrowers.
“The underlying credit environment remains benign but, as with the early days of Covid, the banks are using the flexibility of IFRS 9 provision to build buffers in advance of potential economic deterioration,” Joseph Dickerson, managing director at Jefferies International Ltd., said in a message on Friday, referring to global accountancy requirements.