June 29, 2009

UK banks have repaired their profitability in the past three months by widening the spread between loan and deposit rates "to a record degree", according to the latest financial sector survey by the Confederation of British Industry and PricewaterhouseCoopers.In the hard-pressed banking sector, the margin increase at customers' expense provided "some support to profitability, which was broadly flat after six consecutive quarters of decline", said the survey.

But business volumes fell at the fastest rate since March 1991 and were considered "well below normal", for both domestic and overseas customers.The survey, published today, found what it called "the first signs of optimism" returning to some parts of the UK financial services industry since the beginning of April.