UK banks to reap billions from hedging against rising interest rates

Finance chiefs this quarter confirmed that the hedge will be a major contributor to earnings as swap contracts reprice at higher interest rates. — Reuters

LONDON: The UK’s biggest banks stand to gain billions this year from hedging against rising rates.

Structural hedges, the balance sheet exercise which reduces banks’ sensitivity to interest rate moves, were worth well over £1bil (US$1.3bil or RM5.9bil) at each of Britain’s top lenders in the first half of 2023.