A savage cocktail of market volatility, increased costs, low interest rates, fines, regulatory burdens and sluggish global growth is taking its toll.
In a dramatic illustration of the effects of these difficulties, Britain’s financial sector was yesterday knocked from the top spot of the FTSE 100, replaced by consumer goods companies including Unilever, Burberry and Diageo. It's the first time in a decade that financials haven't led the blue-chip index.
Little wonder, therefore, that one leading City figure was heard to ask yesterday, “Who would want to run a bank these days?”, adding “I feel sorry for my friends who run banks, I really do.” He may well have had Jes Staley in mind, the new boss at Barclays whose results on Tuesday left the City cold, to put it mildly.
Staley isn't alone in presiding over difficult times. Just three weeks ago, banks suffered a battering on the stock market that saw share prices fall to lows not seen since the beginning of 2009. It marked a low point for a sector that's had little to smile about so far this year.
Despite banks making some gains in recent weeks, many City analysts remain bearish. David Buik of Panmure Gordon says “it's hard to see where a sustained silver lining is going to emanate from within the banking sector,” noting that sovereign wealth fund managers have been among the largest sellers of the banking sector this year. This does not augur well.
Furthermore, banks are going to have to struggle on through a longer than expected period of low rates. Alongside this depressing reality, there are still plenty of politicians prepared to indulge in banker bashing, but lazy claims that 'banks haven't learnt their lesson don't stand up to scrutiny.
The introduction of the Senior Managers Regime, which comes into effect next week, along with encouraging results from recent stress-testing, demonstrates that the environment has changed considerably since the crisis.
While banks' current woes may not be likely to elicit much sympathy from the general public, the truth is that their health and longterm viability matter a great deal to the wider economy and nobody should revel in their struggles.