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The UK’s banks are putting in highly divergent performances on the UK 100 this morning. Why is this? Interest rate inaction from BoJ Governor Kuroda has been met with a rubbing of hands and a lick of the lips from globally present Barclays, the best performer on the index this morning up over 3%. Asian focused banks HSBC and Standard Chartered are also posting gains at +0.75% and +0.6% respectively, thankful that painful negative rates didn’t go deeper, and that the ‘tweaks’ made to its stimulus programme will show that there are more options left and will eventually jolt the stagnant economy back into life.
In stark contrast however, RBS is very much languishing. While peers are enjoying another round of drinks at the accommodative policy party, RBS is being turned away at the door. The latest attempt by the bailed-out and still 73% taxpayer-owned bank to ditch its 300 Williams & Glyn branches (to meet EC bailout conditions) has failed, as Santander puts its cheque book back into its pocket. RBS’s share price is -1.2% with other suitors yet to raise their hands. To add insult to injury, fellow bailout peer (although almost privatised; less than 10% to go) Lloyds is enjoying a strong performance this morning +1.7% as those looking for UK bank exposure choose anyone but RBS.
Henry Croft, Research Analyst – 21st September 2016
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