BBC News

The major UK banks saw a 45% rise in core profits in 2012, but that hike was wiped out by a mix of regulation and their own mistakes, a KPMG report says.

Its performance report looks at Barclays, HSBC, Lloyds Banking Group, RBS and Standard Chartered.

It says the banks' combined core profits last year were £31.5bn.

But this was eliminated by the "cost of past mistakes and increased creditworthiness of their own debt", the audit firm's report says.

This development meant that the major banks actually saw their statutory profits slump 40% on the previous year, at £11.7bn, KPMG added.

In addition, there were other fines and penalties from regulators and "redress provisions" of £4.7bn, and a £12.8bn accounting hit for losses caused by the revaluation of "own debt'", "reflecting the credit markets' more positive view on bank issuers and interest rate movements".

"Banks had a better performance year in 2012 but their improved core profits were eaten up by fines and other exceptional items, leaving them down on 2011," said Bill Michael of KPMG

--snip--