Mark Casci: Banks must lead banishing of anti-business sentiments

State-backed Royal Bank of Scotland reports on Friday and investors will be on tenterhooks to see whether the lender is hit by a pending settlement with the US Department of Justice over claims it mis-sold risky mortgage-backed securities in the run-up to the financial crisis.

Were this to prove true then RBS would be facing a full decade in the red, as consensus figures point to a full year attributable loss of £592m. The bank could also take an impairment charge on the back of Carillion’s collapse, having been one of the outsourcing and construction firm’s lenders.

Before this comes Lloyds Banking Group, whose boss Antonio Horta-Osorio steered the group back to private ownership last summer.

However, the results on Wednesday will also see the group face questions over any further hit from collapsed outsourcing giant Carillion, given the sector’s exposure to the group.

Lloyds is also in the process of paying victims of fraud at the hands of HBOS Reading staff between 2003 and 2007.

Barclays follows with its finals on Thursday as its battles its own legal drama after the Serious Fraud Office (SFO) cranked up the heat.

The SFO has charged Barclays Bank with unlawful financial assistance in connection with a three billion US dollar loan given to the state of Qatar.

The SFO had already charged Barclays plc, the holding company, as well as four former executives, with conspiracy to commit fraud and unlawful financial assistance. Away from the SFO case, Barclays is set to post a healthy rise in profits to £4.7bn, up from £3.2bn in 2016.

The mixed bag in terms of bank’s fortunes tells its own story of a sector which creates so much wealth and employment, as well as being at the heart of the lives of business people and consumers.

Times are hard for the sector as it wrestles with the rise of challenger banks, online security, keeping increasingly deserted branches operational and the spectre of Brexit, the knock-on effect of which poses a mortal threat to its ability to attract the best the industry has to offer worldwide.

However, it would be good to see any issues concerning allegations of sharp practice banished for good.

The banking sector’s image took an extremely severe knock from the financial crisis.

Indeed, reading Tim Shipman’s excellent account of the 2016 EU referendum, All Out War, it was dispiriting to see both the Remain and Leave camps reluctant to use business spokespeople during the campaign, owing to the public’s mistrust generally of the corporate world.

And indeed the leader of the opposition, along with his shadow chancellor, never miss an opportunity to trash business, oblivious to the pivotal role it plays in wealth creation and employment.

The emphasis on providing greater social good was perhaps illustrated most sharply last month, when Larry Fink, the founder and chief executive of the world’s biggest investment fund Black Rock, wrote to the USA’s largest firms and told them in no uncertain terms how any company wanting support from his $6 trillion fund would need to illustrate vividly how it was going to provide a benefit to society as well as profits.

The rise in populism has taken many forms, as Brexit and the rise of Trump, Corbyn and the Italian Five Star movement has shown.

I know only too well from my contact with the banking sector in Yorkshire how its leaders want a prosperous and fair economy for all.

It can only be a matter of time before Fink’s demands filter around the world, and banks need to be at the heart of this drive.