UK banking analyst attacks Lloyds bank and Royal Bank of Scotland
Jonathan Pierce of Credit Suisse has attacked the recent rise in the share prices of Lloyds bank and Royal Bank of Scotland which between them are now worth around £60 billion, not far from their 2007 high. When you consider the current trading environment as well as the debt situation, maybe the analyst does have a point and potentially the shares have maybe moved ahead too quickly?
When you also throw into the mix the fact that the UK government will at some stage be a forced seller of its stakes in Lloyds bank and Royal Bank of Scotland, probably sooner rather than later, there is particular uncertainty surrounding these two banks. As we touched on in one of our earlier posts, the refinancing of Johnston Press does not appear to have attracted a great amount of interest in the banking industry and it was interesting to see that Royal Bank of Scotland and Lloyds bank were able to offer the best deal. When you consider this deal was struck at nearly 10% on a £400 million plus debt refinancing it would appear that the UK money markets are still very tight.
Is this really a situation which warrants the current rally in the sector and Royal Bank of Scotland and Lloyds bank shares in particular?
Share this..
Related stories
UK economic output declines further
The Office for National Statistics has yet again revised its figures regarding the performance of the UK economy over recent times. After initially reporting a 1.9% decline in the first quarter of 2009 and a 4.1% decline on an annual basis these figures have been revised to a 2.4% quarterly decline which equates to a 4.9% decline over the year. In simple terms, these are the worst figures ever for...
Read MoreWill Royal Bank Of Scotland Need More Funding After The £12 Billion Rights Issue?
While Royal Bank of Scotland (RBS) may be on the verge of securing one of the largest UK fund raisings of recent times, via a £12 billion rights issue, a report from Deutsche Bank AG suggests that RBS may need to return to the market some time soon for more funding. The report from Deutsche Bank AG does not suggest that RBS is in any trouble. But it does cast doubt on the strength of the group&r...
Read MoreMiddle England is the new battleground
Ed Miliband, the new leader of the Labour Party, has been very vocal with regards to the so-called "squeeze middle" which in effect is the middle classes in the UK who are being squeezed by UK government spending cuts, tax rises and benefit reductions. As a consequence, many believe that Middle England will be the new battleground for future political power in the UK with Ed Miliband already makin...
Read MoreIs it too late to save the worldwide economy?
Stock markets around Europe were higher today in early trading with many investors of the opinion that the economic situation in Europe and around the world has got so bad that action will need to be taken on a global basis. In a rather bizarre turnaround, the likelihood that economic sanctions and various fiscal programs will be introduced in the short to medium term has given some investors hope...
Read MoreHow influential is the City of London within the UK economy?
Each day we hear news regarding lucrative remuneration packages in the financial sector, the power of the stock market and the need to rein in risk-taking in the UK banking sector. But how influential is the City of London financial market against the overall UK economy?
When you consider that back in 1998, when we entered a period of deregulation which created a significant boom in...