UK banks Barclays, Lloyds Banking Group and Royal Bank of Scotland are faced with having to refinance as much as £350bn (€386bn) of cheap government-assisted funding at higher levels over the next couple of years, potentially causing a £6bn drop in earnings.

Credit Suisse analysts said in a report today the three banks have taken almost £250bn worth of UK Government-assisted funding under the special liquidity and credit guarantee schemes, but that this figure could be closer to £300bn-£350bn by including other forms of such funding.