As Britain prepares to negotiate its EU departure, some banks are likely to decide within two months where to set up new continental bases to serve clients after Brexit. In the meantime, the fortunes of Britain's banks appear to be looking up, with Barclays nearly doubling its quarterly profit and RBS announcing its first quarterly profit since September 2015. Ciara Lee reports.
A bumper first quarter for Barclays with quarterly profits doubling compared with a year ago, to 1.7 billion pounds. And Royal Bank of Scotland also swinging to a better than expected first-quarter profit of 259 million pounds, sending its shares up as much as 4 percent. RBS says 2017 will likely be the final year it makes a loss. If challenges linger .... As they do for Barclays. Despite the profit jump, it saw its shares tumble five per cent as investors focussed on a poor performance at its markets business. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "Barclays of course has the ongoing issue in relation to its chief executive which has yet to be resolved. And Royal Bank of Scotland of course continues to face the uncertainty associated with the U.S. Department of Justice." And further uncertainty looms as banks grapple with Brexit. Many are expected to decide within two months where to set up new continental bases, with Frankfurt already a firm favourite. The ECB will host a meeting on May 4th, spelling out what they have to do to apply for a licence. That news coming as HSBC announced it may need to relocate around a thousand roles to Paris over the next two years. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "There are many blood-curdling headlines . And therefore I think that that is going to remain a major uncertainty, which I suspect is going to continue to cast a fairly long shadow over the sector. It was a strong end to the week for banks elsewhere in Europe. Bankia and Caixabank in Spain outstripping forecasts ... While a long-awaited turnaround in UBS's wealth management business helped it deliver its second-best start to a year since the financial crisis.