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High street banks see profits soar in post-Covid-19 surge

Nearly all of the big banks omitted fintech from their quarterly reports, rather choosing to focus on mortgages and the post-Covid-19 economic surge.

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While digital banks are just starting to eke their way to profitability, traditional banks have reported soaring profits.

All the biggest UK high street banks saw their profits above the £1bn mark during this Q3 results season, with Barclays hitting a record £6.9bn (before tax) quarterly profit earlier this month largely propelled by its corporate and investment banking divisions.

“On top of a good first half, a strong third-quarter performance means Barclays has delivered its highest Q3 YTD pre-tax profit on record in 2021, demonstrating the benefits of our diversified business model,” Barclays CEO Jes Staley said, just days before he resigned.

In the last quarter alone, Lloyds lent an additional £2.7bn in home loans taking its total mortgage lending to £15.3bn and pushing its profits to £2bn.

Santander saw its profits in the UK jump fivefold to £975m (€1.145bn) from £187m (€220m) in the same quarter last year.

“We delivered solid top-line growth across all of our regions and businesses again this quarter. Our performance in the US and the UK were particularly strong, underscoring the effectiveness of our strategy in these important markets,” Santander’s executive chairman Ana Botín, said.

NatWest’s pre-tax profits jumped to nearly £1.1bn up until the end of September, which can be attributed to the post-pandemic economic bounce back and increasing its mortgage lending to £2.5bn in the quarter.

HSBC also saw its profits buoyed by the post-Covid economic surge, with its pre-tax profits climbing to £3.9bn, up 74 per cent in the third quarter of 2021.

Surprisingly, only two of the five big high street banks even mentioned fintech in their quarterly reports.

Barclays mentioned fintech regarding its Female Innovator Lab and promoting better diversity and inclusion in the sector, while NatWest mentioned its purchase of fintech RoosterMoney, which it announced last month.

HSBC and NatWest’s flanker brands Kinetic and Mettle were not mentioned at all throughout the two banks’ respective quarterly reports.

While Santander’s flanker brand PagoNxt, increased revenues by 41 per cent in the first nine months of the year to just over £284m (€334m) and now serves 1.2m merchants, 7,300 companies and 700,000 customers.

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