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Banks: bad debts `have peaked`

12/11/2009

Barclays and HSBC have both asserted that the rise in bad debts (debts which won`t be repaid) has already peaked, despite widespread worries about people`s ability to repay their debts - and the effect this could have on the entire banking system.

As the Telegraph reports, HSBC`s chief executive Michael Geoghegan said, "I believe that the biggest jolt has now passed through the global economy."

However, he also said that "it is too early to claim victory, especially while unemployment is still rising in the West."

Barclays, meanwhile, reported that bad debts `would be at the bottom end of earlier forecasts of £9bn-£9.6bn` this year.

Over the past nine months, bad debts had risen steeply at Barclays, rising by 65% to £6.2bn, but things have been looking more positive recently, and Barclays believes that the worst may actually be over.

This optimistic news from two of Britain`s biggest banks (one of which - HSBC - is the UK`s biggest lender) does contrast with the findings of PricewaterhouseCoopers` recently released `Precious Plastic 2010` report, which claims that the already `historically high` levels of bad debt on credit cards are set to rise even further, and are expected to equal 9% of outstanding credit card debt in 2010.

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Consumers took on more mortgage debt in July 26/08/2010 - Consumers took on £2bn more mortgage debt than they repaid Debts called in by parents 26/08/2010 - According to research, `the bank of Mum and Dad` is Teenagers `scared of debt` 19/08/2010 - Nearly two thirds of teenagers are `scared` of debt, according Rising household costs could pressure people in debt 10/08/2010 - The UK may be about to see a rise in