Last week was bank reporting week in the UK, with all four big UK banks - HSBC, Lloyds, Barclays, and RBS - coming out with 2017 results.

(Note the order - could there be an indication of quality?)

Overall, it was an encouraging picture. Full year underlying profits rose 11% at HSBC, 24% at Lloyds, 10% at Barclays, while RBS produced its first annual profit in ten years (even ’statutory profits’, as opposed to ’underlying profits’, were positive at £750m).

As one would expect, there were rewards for shareholders.

Lloyds upped its dividend by 20%, and promised £1bn of share buybacks. Barclays reinstated its 2015 dividend at 6.5p per share, reversing the 50% cut it made in 2016, and suggested it too would look at share buybacks.

HSBC held its dividend, but there have been substantial increases in recent years and the shares already yield 5%. The issuance of additional Tier 1 debt currently prevents it buying its own shares, but later this year it will likely do more of this.

RBS is still not paying a dividend (10 years after its last one), but once it settles with the US Department of Justice over the alleged misselling of US mortgage securities it is likely to reinstate one.

The better picture fits with a UK economy that trundles along with some momentum - albeit at a 1.5% annual pace rather than 2.5%. While things haven’t been brilliant, they have at least been OK.

Interest rates are still low, meaning affordability criteria for mortgages are good.

Overall loan growth may be low, but consumer credit is still growing, assisted by select bolt-ons, like Lloyds’ purchase of the MBNA credit card book. Net interest margins are flat, or up slightly. Impaired loans and provisions remain low.

HSBC, with its exposure to loan growth in Hong Kong and Asia, and higher US interest rates, is in a better place in this respect.

While HSBC’s and Lloyds’ results were much as expected, positive surprises came from the other two.

The fact that RBS finally made a profit last year was a relief.

The biggest positive surprise was Barclays. Its investment bank did much better than peers (even US peers) in Q4.

All its main divisions are now profitable. It still has to weather issues (and possible fines) related to its 2008 refinancing, and retain its CEO (Jes Staley is under FCA investigation for past HR issues). But it could be past the worst.

One of the common themes in the various CEOs’ statements was a commitment to technological investment. Lloyds is investing £3bn in the next few years in systems. RBS incurred a £2.5bn restructuring charge over the next two years, partly for digital investment.

The flipside of lower UK branch transactions, and a the reduction in branch networks, is more ’video bankers’, as RBS puts it.

RBS is now offering ’digital mortgages’, with the agreement period cut from 23 days to 11 days. It has also invested in an ’AI chatbot’ called Cora. This ’visual avatar’ is apparently available 24/7 with no ’wait time’, and can field unlimited queries simultaneously. Over the past ten months, it has held ’400,000 conversations responding to over 200 different questions.’

There were a few slip ups (Lloyds recording another £600m of PPI charges). But overall, the banks look to have got through a tough patchâ?¦ perhaps their worst period in a hundred years (or maybe since the nineteenth century)?

In terms of value, HSBC and Lloyds trade above book value, while Barclays (conduct fines, governance issues, questions over investment bank) and RBS (conduct fines, government ownership, and ten years of restructuring) trade below.

The opinions stated are those of the author and should not be taken as investment advice. Any recommendations may not be suitable for all, so please contact your financial adviser for further guidance. The value of investments can go down as well as up.