Did UK banks see an increase in financial performance between 2004 and 2013Tools LI, WENSI (2014) Did UK banks see an increase in financial performance between 2004 and 2013. [Dissertation (University of Nottingham only)] (Unpublished)
AbstractThe aim of the research was to establish whether the UK banks were able to experience an increase in financial performance between after the global financial crisis, whilst comparing the financial performances before, during, and after the global financial crisis. The specific objectives were to find out the mean score for the efficiency of main banks in the UK between 2004 and 2013, find out the total factor productivity of the UK banks between 2004 and 2013, establish whether the global financial crisis affected the efficiency and productivity of the UK banks and evaluate the various financial ratios of UK banks between 2004 and 2013. The data for the research has been taken from six banks namely HSBC Holdings, Barclays PLC, Royal Bank of Scotland Group, Lloyds Banking Group, City Bank and Bank of Scotland. The main sources of data for analysis were from the Tenth Survey of European Banks by the Unicredit banking group and Hoovers Online. These were subsequently confirmed with each individual financial statement of the banks under review for reliability and validity purposes. The findings in this study on efficiency suggest that the measure of efficiency of UK banks is approximately above 95 per cent, on average, for all banks regardless of the assumption and model. The sampled banks were large in size (in the top give category) and enjoy scale economies. With respect to the specific banks, Standard Chartered bank was outstanding—maintaining a clean sheet in the entire period of analysis. The performance was followed by Barclays, HSBC and Lloyds in that order. The performance of Lloyds seems was the poorest during the recent global crisis. The differences in banks efficiency potentially stems from differences in other variables, such as managerial acumen, product mix and the dexterity with which new technologies are adopted. The study finds that apart from scale economies, banks realise additional cost savings by being merely being bigger. Lastly, technological and regulatory changes after the global financial crisis were found to have had positive effects on the cost structure of banks in the period spanning 2009 and 2011—all banks maintained 100% efficiency over the period. Additionally, the findings suggest that banks that adopt newer technologies to optimise loan loss provisions are more likely to cost-effective than those using traditional approaches.
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