Investors' Chronicle UK banks, Kitwave & Next 15: Companies and Markets Show
Oct 31, 2025
Hugh Moorhead, a banking analyst, explores the UK banking sector's outlook, focusing on provisions for motor finance and regulatory impacts. He highlights Barclays’ significant private credit exposure. Valeria Martinez, a financial journalist, analyzes Next 15’s recent struggles, including a major client loss and management shake-up, and discusses its restructuring efforts to regain market confidence. They also look into Kitwave's resilient growth despite a recent profit warning and how it's navigating domestic challenges.
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Episode notes
Private Credit Is Material But Manageable
- UK banks have noticeable but limited exposure to private credit, with Barclays holding about £20bn (c.6% of loans).
- Continued lending into private credit could force more provisions if defaults spread.
Rate Curve And Efficiency Lift Bank Profits
- UK banks are benefiting from loan growth and a steeper rate curve which boosts net interest margins.
- Efficiency gains at NatWest and Barclays and improving provisions help underpin profitability.
Position For Possible Bank Levies
- Expect banks to be potential targets for higher banking levies as the government seeks revenue from profitable firms.
- Consider favouring less investment-banking-exposed lenders if you prefer lower episodic risk.
