UK banks added £1.6bn to loan allowances in 2022

Increase in set-asides driven by stage-two and stage-three credit-loss reserves

Loan-loss reserves at the UK’s top four lenders increased by £1.6 billion ($1.9 billion) last year, a 7% increase driven for the most part by set-asides for creaky and defaulted loans.

Allowances for credit losses across Barclays, HSBC, Lloyds Banking Group and NatWest Group totalled £24.6 billion at end-2022, up from £22.3 billion the previous year.

The new funds accrued primarily to stage-two and stage-three loans – those, respectively, at increased risk of default since origination, or

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