What happened to British banking?
Back in the 70s, British banks were dominating global finance — kings of commercial and investment banking. Even up until the GFC, they were still relevant players. Now? It feels like the entire sector has collapsed into mediocrity. Quick rundown:
- Barclays
Still technically a BB, but barely. Market cap under $50bn — not much bigger than Truist. IB franchise still around, but miles off JPM/MS/GS. - NatWest (RBS)
Absolute shadow of what it was. The ABN AMRO acquisition was its high point, and it’s been in decline ever since. Purely domestic now. - Lloyds
Fully retail and commercial. Basically no presence in IB (even demostically). No global relevance. Basically a big building society at this point. - HSBC
Not even really British anymore (never really was, but even less so now). Entire focus is Asia, especially now that they’re dropping IB outside of the region. - Standard Chartered
Same deal — very international but not really British in terms of culture or strategic direction. Big in EM, not in London. - Rothschild
M&A-only and still elite in that lane, but it’s Franco-British. Doesn’t really represent British banking as a whole. - Everyone else (Nationwide, TSB, Abbey National, etc)
Barely worth mentioning. TSB and Abbey National aren’t even British-owned anymore (Sabadell and Santander respectively). Nationwide’s a solid mutual but not in the conversation globally.
Anyone think there’s a path back to relevance for British banking — or is the golden era well and truly over?
Simple:
American Banks (GS, MS, JPM) are bigger in size, have more relationships, are willing to work longer hours and are considered to be better in quality.
No, they have many Asian workers who are willing to work longer and harder.
Nice troll attempt,but it’s across the board lol. Maybe if all of Europe wasn’t below 15 in every rank ever then you would be more relavent. Just keep the mooching off the US strategy.
What's your question?
Can British banks make a comeback or are they doomed to become continually more irrelevant?
Who gives a shit? Just go get a job at whoever will pay you.
Banks doomed.
All you've got left is HQs of big 4 that in M&A market do take material chunk of volume.
They were all consolidated:
Cazenove -> JPM
Morgan Grenfell -> DB
SG Warburg -> UBS
Smith New Court -> BofA
Schroder -> Citi
Further reading: Blue Blood, written by the former CEO of Cazenove.
Exactly, just finished Blue Blood and it breaks down how the US banks came into London and quickly realised they had to acquire an established Equities / Corporate Broking house. Wasn't all just British banks as you had the likes of Dresdner, Warburg (think DLJ and First Boston too? Could be wrong) etc operating there strongly before the big bulges came in. At the time, Americans came in thinking Corp Broking was the best way to access FTSE 100 Chairs and their boards, to translate into future and better advisory roles. Virtually all the American banks tried to acquire Cazenove at some point as it had the best equities and corp broking access.
Numis and DB as well
Thatcher deregulation in 86 caused the ‘big bang’ in London. All of the US banks swept in and dominated the inefficient ‘old boy’ firms.
beacuse uk and europe in general are a joke and full of whiny losers
We'd still never consider buying your Ford's, Yankee !
15% of cars driven on british roads are Ford
Interesting. Enjoy your meagre 2 weeks of PTO. Cool to have some money, but when was the last time that you were truly happy in life? I bet it was not in corporate America.
reminder to come back to this comment after my 3 week fully paid and offline trip around the coast of Italy enjoying some great cuisine free of excessive additives - as mandated by EU directives - and talking with culturally, highly educated, and politically non-polarized people about life further than the meaningless and void pursuit of materialism. Did I also say that we have a higher appreciation for beauty and dress better than the yanks? More art, more museums, prettier and less materialistic women, and healthier people in general.
Enjoy your concrete grey views of NYC
The decline will get worse. There's a lot of talk about heritage and nationalism in Europe as of late...but when I look around, regardless of what we in the UK can fix ourselves...I really don't see how, in 2040, we're not a complete American vassal state.
Finance is the key service (alongside law) that is carrying the UK's economy, go outside of London, and it's pretty grim. For as much as people outside of London love to complain about London, they sure do leech off of us and our work. The best hedge funds in London are American. The best banks in London are American. The largest Asset Managers in London are American. If you work for an American firm as I do, you likely get paid well, but most of the value you produce goes back to America, not the UK.
There has been a continuous decline in British businesses over the last 2-3 decades, with staple British firms closing down and being replaced by the Amazons of the world. McDonald's, KFC, Starbucks, Netflix, and Apple are businesses that I think of when I think about the "consumption" bit of our country's GDP. Our universities don't have entrepreneurial hubs/VC attention the same way American ones do, so we can't hope to compete in the innovation/unicorn game, and our best talent, across all fields, leave for the US at some point anyway.
Our ageing population will continue to drive a wedge in our demographics and increase fiscal strain as the dependency ratio increases, we will almost certainly lose the NHS and large parts of the welfare state, and I'm willing to bet my flat that it's not British businesses that will monetise these events...
I've started seeing more American chains around too. Popeye's and New York Street Pizza
UK is completely over (brit saying this). GDP already worse than Mississippi and that's including London (which is a tier 1 global city). Remove London from our economy (which is ran by US firms as you say, and property is owned by Russians and Arabs) and we're the same as Italy who's economy is not great (based on GDP per capita). Our GDP already (including London) is closer to Kazakhstan than the US. Only reason we have prestige is because we used to run a quarter of the world and our language is the lingua franca of the world.
The US is in equally dire straights and we are not the nation we once were. 10% of families here own 90% of stocks and 50% of the 6 or so Trillion COVID stimulus we printed was saved not spent, it was unnecessary. We have 130% d/GDP. Our current revenues only cover Medicare, food stamps and social security. We borrow our interest and defense. Our country is largely divided and slipping in various performance metrics, meanwhile we focus our energy and money on social engineering.
Through the 90s, the world has largely shifted to a true global trade system where specialization is increasing, supply chains becoming more vulnerable, and the value of everything fluctuates based on monetary and fiscal policy rather than the true value of the goods. Despite the US outsourcing its production, though durable goods like electronics have remained cheap, assets have increased at a disproportionate rate. In the post World War era, the baby boomers generation, you could work a shitty factory job and buy a house and car. Now that same job in real terms wouldn’t meet bare minimum living requirements.
This comes at a time when the world has access to all info instantly. Since the advent of social media and the sea of information, people have moved from long to short form medium. Around the globe, internal conflicts emerge between various classes: races, political parties, wealth. Here in the states we’ve gone from a nation which once valued reading and how to think and where the people generally had power and solidarity, to one where everybody has the attention span of a 10 year old and are influenced largely by their news media which takes most power from them.
I’m not saying the narratives we believe are part of an elaborate plan but the algorithms designed to increase engagement tend to suggest inflammatory emotionally stimulative content which creates echo chambers and division. This has lead in my opinion to the radicalization of western nations and is what is driving these violent groups that burn statues and buildings and attack people based on skin color in the name of peace and equality.
These among other things throughout history lead to destabilization of other leading powers: Rome, Greece, Dutch, Ottomon, colonial Brit’s, Spanish, French. All of these nations over borrowed to fund their wars and eventually the wealth discrepancy caused distrust in the government amongst the people and lead to weakness against invasion.
Look no further than the recent tariff fiasco. Majority of the people giving an opinion couldn’t define even a tariff or inflation yet they know with certainty what US fiscal policy should be. We’ve been predicting a recession since 2019, our fiscal situation is unsustainable on its current trajectory, our market has rallied at an unprecedented rate, and we have data on tariffs dating hundreds of years yet people act surprised. All of the above aren’t fatal and we aren’t the same world we used to be, but these trends clearly aren’t a recipe for strength and while history doesn’t repeat it tends to rhyme.
I'm a patriotic British person here so this pains me to say this but the US is in no way near dire straits as the UK is.
As much as the US is schizophrenic in its policies and seemingly paranoid about every country taking advantage of them, it's in a much better position than the UK is.
Solid take and very well put.
To be fair, this is not just a US or UK issue. This is a global issue. China, despite having astronomic GDP, is also beginning to falter and deal with stagflation. Lots of people all over the world are struggling now, so it's not a Western thing imo, more so global. Just depends on your geographic location to determine how bad.
The UK will be Pakistan 2.0 in 5 years. No much IB in Pakistan...
From what I heard native Brits aren't exactly competent either
Deranged.
Ukistan has a good ring to it.
Liverpool vs. Milan; 2005 UEFA Champions League Final. The UK will make a comeback.
UK is on the path to self destruction, who tf cares.
So as touched on above (basically), you had globalisation.
What's missed is that basically the European financial system (including old school Britain) is banking centric. That is, if you wanted access to capital (equity or debt) you needed to get it from a bank - with securities being less relied upon (and even then these securities were not really owned by the public, but were typically intermediated by such banking institutions). Given this such requests and provisions of capital tended to be to firms that had existed for a while (typically family owned, or large established firms).
Contrast this to the US - since literally the late 1800's it relied heavily on widely owned securities (bonds, stocks etc) to finance new companies and new projects (i.e. the railroads, U.S. Steel - the first billion dollar company (founded in 1900) was actually an LBO etc).
Why does this matter? The DNA of firms in the US was securities-based. Securities are innately more scalable, as they can be owned far more widely and require only initial marketing by the Bank. Banking-centric management (which is the Merchant bank style ownership relied at most on clubby-syndicate relationships or just simple balance sheet deployment).
So when deregulation & globalisation came through you had firms bred on a faster and more scalable system of raising and deploying capital competing with firms that relied on smaller relationship style lending and financing.
What about the future? Well from my perspective it feels like the pendulum began swinging backwards post '08 and has been accelerating since. Basically securities have one downside to banking - volatile prices and as a result volatile returns is what really was the driving force behind Private Equity and Privates in the US (note that PE-style Merchant Banking - literally taking equity stakes and placing board members on companies; has been done in Germany since the 15th century); is that LP's wanted to see less volatile returns. See the academic work from the 70's stressed reduction of volatility in regards to return; the hijinks of the Privates world was that there was simply less observable prices and therefore smoother returns - this became the Yale Endowment model. Meanwhile today, the breakthrough of passive ETFs and the assault on active management has fundamentally changed the structure of equity markets favoring market-making firms like Jane Street who can balance sheet stocks intra-day vs. the current banks.
Will we see a resurgence of British banks? If globalisation recedes (which means American and non-UK capital holders ae not interested in owning UK-based firms) and the clubby-syndicate requirements of localised Private Equity remain, then I see potential, but it would look more like a greater slice of a much, much smaller pie.
So long JPM and short GS?
The UK is a cucked nation
England has been declining ever since blowing a 13 colony lead.
Certainly never under labour leadership.
It's a sad time. There are still some bastions of Brits, usually in UK focussed teams.
Most of London IB is full of sweaty euro bankers who just sit there with airport in grinding sheets. I miss when there was culture and banter in the office.
Brother, who cares?
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