The early price action in the UK banks:
And in Europe
Broadly speaking, brokers are advising clients to stick with well capitalised banks with strong internal capital generation and avoid the rest in the wake of the Basel committee’s report, which don’t forget is still a consultation paper.
As for the UK banks, the prospect of counter-cyclical provisioning seems to be doing most of the damage, along with concerns over life assurance deductions.
That said, Barclays is being pressured by the Basel proposals on deductions relating to its shareholding in BlackRock shares and its securitisation positions, according to analysts.
Anyway, the full Basel paper is available here, and the liquidity supplement is here.
And Alphaville readers will be pleased to know that Lloyds boss Eric Daniels remains in denial upbeat.
From Friday’s FT:
“What I’m excited about is that we have a very solid platform from which to build,” says Mr Daniels. “The capital question has been ticked. State aid is done. And what we have now is a great distribution system. Some great brands. Very, very good people. A large customer base. So we have all the ingredients to really build the leading UK bank.”
The anger among Lloyds’ private investors at the recent general meeting was palpable. But Mr Daniels’ normally guarded veneer gives way to a spark of excitement when he talks about Lloyds’ capacity to become the country’s most profitable retail bank as well as its biggest by market share. “After you get through the lumps, this is going to be one hell of a deal,” he promises.
Sad but true. He really does believe HBOS was a good deal.
Related links:
Digesting the Basel reforms – FT Alphaville
All hail the Basel banking regime change – FT Alphaville