Baking results - when is a one-off provision not a one-off?

Interesting to see the most of the UK bank's half year results this week;

Pick of the bunch is RBS, whose underlying profits came in much higher than expected. The Bank has over a long period done a good job of selling down its Real Estate debts. However, in the long-term the more of less closing of its investment bank make it a much less appealing business. It's grip on UK SME business and personal business is strong and will remain so, enabling it to retain a core income. This maybe under-threat as its new CEO is very keen on retail banking and credit cards - but still, no one in the Treasury can argue it is a risky bank anymore. Shame the resulting value of the bank is about 50% of what was paid to bail it out. Somehow I doubt future Chancellor's are going to want to put that write down into the books - making it tricky to see the end of state aid.

Barclays has many similarities to RBS, for a longtime the bank was far superior in coping with the crisis, but the last two years have seen the end of that. It's new CEO also is looking at closing down the investment bank and pushing up retail banking - if all the Banks have the same strategy this may prove good for customers, but not for shareholders. It's results are underwhelming, but provisions are low suggesting little systemic risk.

Lloyds is the average of the bunch. Like the other banks it is keen to show off underlying profits, less keen to highlight the one-offs' that drag its profit down. The PPI mis-selling provisions keeps going up, there are huge fines for various pieces of LIBOR fixing and market abuse. All in all over £1 billion.

All the banks play the standard accounting trick of including these items as one-off. But there they are, year after year, going up and up and up. PPI Provisions have increased for over 2 years, they are hardly one-off's.

No wonder the shareprices lag the markets and are at 50% of where they were in 2007/8. One day perhaps all the bad news will be in the public domain, but the various CEO's have been saying the end of the road is in sight for seven years - I think there will still be two or three to run and then we will be into the next recession in any event!