By Marcus Leach

A report published by Banker magazine suggests the UK banking sector has slipped behind its main competitors since the global financial crisis.

UK banks are now fifth in the world in terms of those that are most profitable, having, four years ago, been second on the list.

The report said that, over the past four years, the UK banking sector has fallen behind China, Japan and France as it struggles to regain its former position.

Compared to their 2007 peak profits of UK lenders are now 58% lower, a figure seriously influenced by the fact many UK banks had to seek financial support from the government following the start of the recession.

Worst hit was Northern Rock, which was nationalised in 2008, and at present remains in public ownership. Although a sale is expected in the near future.

"The British banking sector was the envy of the world in the boom years," said Brian Caplen, editor of the Banker.

"It now faces a Herculean task to regain the position of strength it had four years ago.

"The poor state of much of the British banking sector three years after the crisis is a worry, and there are serious doubts over whether the sector will ever recover."

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