Shares in UK-listed banks are under pressure as Berenberg Bank cuts its ratings, target prices and estimates across the sector, with Royal Bank of Scotland falling 1 percent on a double-downgrade to “sell” from “buy”.
Berenberg also cuts Standard Chartered to “sell” from “hold”, and reduces its respective target prices on all the UK banks including Barclays , Lloyds Banking Group and HSBC.
Berenberg says in a note the current repressed financial environment is a very poor one for bank profitability, but one which enables governments to reduce debt at the expense of risk-free asset holders.
“Those bank managements that recognise these issues and adjust strategies will be rewarded by the market; sadly, none has taken the chance so far. We see negative implications for UK banks. We downgrade our forecasts by 25 percent on average and are now 30 percent below consensus.”
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