Bank shares down on fears for the future
The UK banking sector has today come under pressure on fears regarding the future of Lloyds bank and Royal Bank of Scotland. Despite signs earlier last week that the situation was improving at these two banks in particular, the revelation over the weekend that Lloyds bank may look to raise up to £15 billion in the market place and a downbeat statement by the Royal Bank of Scotland has made many investors think again.
When you also take into account the dramatic reduction in lending to both consumers and the corporate market there are fears that growth in the sector may be some way off and ultimately many consumers and many businesses could fail in the meantime. The UK government is still attempting to increase lending liquidity in the market place but so far, despite a very public and very strong campaign, there are no signs of the banks giving in as yet.
While the short to medium term future of some of the U.K.'s best-known banks is difficult to predict, as and when the sector show signs of recovery we could see takeover speculation and merger speculation return to the marketplace. Will oversee predators attempt to take advantage of the relatively low value of banking shares in the UK?
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