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United KingdomBest bank: Barclays |
The UK’s best bank, Barclays, has had a particularly good year relative to its peers, which was reflected in stock price performance, especially in early 2020. While the group has seen its return on equity rise for the last three years, the UK ring-fenced bank – led by chief executive Matt Hammerstein – saw underlying profit rise by almost 7% in 2019.
The previous winner of this award for the last seven years, Lloyds Banking Group, still had a higher underlying return on equity in 2019 than Barclays’ group figure, which includes much more activity outside the UK. But the underlying return on equity at Barclays UK at 17.5% is higher than Lloyds’ 15%.
Moreover, the recent growth of Lloyds’ UK consumer credit business was becoming a worry, even before the coronavirus crisis.
Barclays’ cost-to-income ratio is slightly higher than that of Lloyds, but Barclays’ 55% in 2019 does not suggest an inefficient business. It is, moreover, a UK franchise of an unrivalled quality, not just in corporate and investment banking but also in areas such as private banking and wealth management, and in some areas of banking for small and medium-sized enterprises.
Barclays more than holds its own in the digital arena, with US research company Forrester ranking its mobile app joint top in the UK alongside local neobank Monzo. Among the features it added this year was a facility to allow customers to use its app to make payments from current accounts held with other UK banks.
Despite this emphasis on digitalization, Barclays pledged this year to halt branch closures where it is the last branch in town. In the late winter it launched a £50 million Adverse Weather Fund to support SMEs and farmers after a period of flooding – which was a precursor of its considerable response to the coronavirus in both banking and philanthropy.