It's not only the UK banks that are warning of increasing bad debts: in America, Citigroup, the world's biggest financial firm, said that US bankruptcies had hurt its credit card revenue. That, along with the fall in fixed-income trading, helped the group to report a decline in second-quarter profit. Net income fell some 5% year-on-year, to $5.4bn, while revenue slid 3% to $20.2bn, well below what the analysts had predicted, at around £21bn.

And now the pressure is really building on Citigroup chief executive Charles Prince, who called the environment "one of the worst we have seen in years", said Jonathan Stempel on Reuters.com. The CEO has not only been battling to hike the underperforming businesses, he has also struggled to improve Citigroup's ethics. Remember that only last year, Citigroup was charged for legal costs related to the fall of Worldcom, Enron, and a number of other corporate scandals.

So how does this compare with other financial institutions? Well, Bank of America Corp the number two US bank said that its second quarter profit rose 12%. Yet BoA seems the exception, as opposed to the rule, as both Morgan Stanley and Goldman Sachs reported revenue-falls that equalled or were bigger than Citigroup's. Citi's investment bank outperformed both its rivals on every annual revenue except debt underwriting, said Christopher Hughes on Breakingviews.com.

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Investors may be worried by Citi's weakening profitability, but if that is accompanied by greater caution from the group as it undergoes change due to its global ethical training programme, then perhaps that's "no bad thing".