Henderson's Ward spies end to Govt bank bailouts

Profitability at the UK's major banks over the next three years may be sufficient to cover impairment charges and even allow for some addition to capital, effectively ruling out any future need for Government bail-outs, Henderson's Simon Ward says.

The chief economist says the major institutions, which he defines as members of the British Bankers' Association (BBA), incurred impairment charges of £31bn in the first half of the year, but points out the same group of banks also posted operating profits approaching £26bn in the same period. "Providing this run-rate is maintained, cumulative profits between the second half of 2009 and 2012 should be sufficient to cover future losses, implying no need for a further government bailout," he says. The H1 losses of £31bn were significantly up from the £26bn in the second half of 2008, an...