They are where they need to be for banks to make an economic return for their investors.”

Gary Greenwood, an analyst at Shore Capital, says: “I don’t think are excessive at the moment. However, after years of struggling to make returns on lending amid an ultra-low interest rate environment, some do not think banks are acting irresponsibly. It’s clear that they are widening their net interest margins at the moment.” “We followed their first quarter results and we shall be following their second quarter results. Harriett Baldwin, a Conservative MP and chairman of the Treasury committee, says: “The committee has been really focused on this issue since the beginning of the year when we first noticed how banks were not really picking up the increases in rates for savers as much as they were for mortgage holders, and it’s just got worse and worse. We’re certainly at the inflection point now.”īut politicians will be watching banks’ latest set of results closely. “I would say we’re at peak returns rather than peak net interest income. “At the margin, the higher rates are still helpful from a net interest income growth perspective, but on the other hand, higher rates act as an impediment for would-be borrowers and from a loan supply perspective, so you will see lower loan growth for banks.

John Cronin, a banking analyst at Goodbody, says: “I don’t think we’re at peak net interest income necessarily.” However, he adds that the industry is reaching a point where higher official rates are net negative for tenders from a returns perspective. Meanwhile, Lloyds posted a similar 20pc jump in its net interest income to £3.5bn after its net interest margin climbed from 2.7pc to 3.2pc compared to the same period in the previous year.īanking experts expect this to increase further when lenders publish their half-year results in the coming weeks.

In their first quarter results for 2023, the UK’s listed lenders revealed the growing gulf between the interest they charge borrowers and the weaker rate they afford to savers.īarclays net interest income jumped by a fifth to £1.6bn during the first three months of the year compared to the same period in 2022 after its net interest margin rose to 3.18pc.

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