Banks posting huge profits. Will they reduce margins?

spence

Thoughts anyone.

H.S.B.C. have posted huge profits this morning and the remaining banks are expected to follow suit as the week goes on.

My question is do you guys think that the margins the banks have built up on their products will be reduced now that they seem to be over the worst of it?

Especially the ones which are majority owned by the state?

My guess is no!

Generali

The banks will enjoy much higher margins than before the crises because loads of the competition has gone. Before 2008 there was precisely zero chance that Lloyds would have been allowed to take over HBOS for example.

ILW

Now the wholesale money markets are drying up, they will need to attract some savers money. All depends what is meant by margins.

chucky

ILW wrote: »

Now the wholesale money markets are drying up, they will need to attract some savers money. All depends what is meant by margins.

are they drying up?

ILW

chucky wrote: »

are they drying up?

They're nothing like they were a few years ago.

Malcolm.

There is an irony here. The banks failure has contributed to low interest rates, leading to building societies failure. The banks mortgage book now faces far less competition.

chucky

ILW wrote: »

They're nothing like they were a few years ago.

so they're not drying up just not as good as pre-2007 levels.

they're better than they were in 2008 and 2009

JonnyBravo

It'll be a slow creep down in margins. It'll take years. 10 years at least til we see what we became used to in the middle years of the 00's.
It's not like the 0.1% margins came into existence overnight anyhow.
If one bank suddenly slashed it's margins it wouldn't be able to cope with the amount of business it would get.

spence

BY margins I specifically was thinking mortgage rates compared to BOE base rate.

Saying that they have increased their margins across the board.

chucky

Chaos_A.D. wrote: »

Thought they'd already dried up

the statement was in a different tense

you can't have both if the money markets are now relative liquid regardless of what is supporting it.

Now the wholesale money markets are drying up

ILW

spence wrote: »

BY margins I specifically was thinking mortgage rates compared to BOE base rate.

Saying that they have increased their margins across the board.

Bearing in mind that banks do not get the money at BoE base then it is not their margin.