Britain’s major banks are gearing up to release their first-quarter results this week, as investors seek signs of stress following Donald Trump’s surprise announcement of sweeping new tariffs. Although the reports will cover only the January-to-March period—before the former U.S. president’s early April declaration—the global economic uncertainty it triggered is already casting a shadow over the sector.
Analysts expect the divide between UK lenders to widen, with domestic-focused banks like NatWest and Lloyds Banking Group largely shielded from the worst effects, while internationally exposed banks such as HSBC and Standard Chartered face greater risks due to their operations in the U.S., China, and Europe.
Global tensions are expected to hit hardest in Asia, where HSBC and Standard Chartered generate a significant share of their profits. The impact is likely to be felt across multiple fronts—from reduced credit demand and increased credit risk to lower client activity in areas such as wealth management.
HSBC, which reports on Tuesday, is forecast to post a 38% drop in profits to $7.8 billion (£5.8 billion). Despite solid performance in Asian wealth management and ongoing benefits from a major cost-cutting initiative set to conclude in 2026, the escalation in trade tensions is expected to dominate investor sentiment. As part of its restructuring, HSBC is closing portions of its investment banking operations across the UK, US, and Europe under chief executive Georges Elhedery.
The bank is also likely to set aside $868 million in provisions for bad loans—20% higher than the same period last year—raising concerns about whether these growing risks could limit future dividends or share buy-backs.
Standard Chartered, another Asia-heavy lender, will release its results on Friday and faces similar scrutiny from investors. China, which has faced a 145% total tariff on most goods, has retaliated with a 125% levy on U.S. imports, a situation that’s fuelling concern across markets.
Barclays, due to report on Wednesday, is another institution in the spotlight due to its substantial U.S. footprint. While its exposure to U.S. consumer lending raises some concern, increased market volatility could deliver gains for its investment banking division, though potentially at the cost of weaker capital-raising activity.
Meanwhile, domestic-focused banks are expected to fare more steadily. NatWest, reporting Friday, is projected to post a 20% rise in pre-tax profits to £1.6 billion. Lloyds Banking Group, which reports Thursday, is forecast to see profits dip by 6% to £1.5 billion.
Both banks are still likely to increase their provisions for potential defaults amid a weakening economic environment. NatWest is expected to set aside £169 million—an 81% jump from the previous year—as it prepares to release what could be its final set of results before the government completes its divestment of its post-crisis stake in the bank.
At Lloyds, bad loan provisions are predicted to quadruple to £279 million. The bank is also awaiting a key Supreme Court ruling that could determine financial liabilities related to the long-running car loans commission scandal.
Despite the uncertainty, some analysts suggest that UK lenders may benefit from global investor shifts. With U.S. banks under pressure, those with strong domestic franchises in the UK and Europe could attract renewed interest. For example, JP Morgan, the largest U.S. bank, set aside $973 million in the first quarter to guard against possible loan defaults—an indicator of wider caution across the sector.
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