Buying shares in UK banks?Is it worth starting to re-invest in UK banks again? What with Barclays announcing massive profit again, with others likely to follow in the coming months. FTSE100 Banks: RBS - ~33p - still haven't risen up since recession HSBC - ~665p - risen up sharply, but still not back to pre-recession level LLoyds -... | |
The short answer, in my opinion, is yes. Barclays is the creme de la creme of the British banks and the one I would invest in first. Most of Barclay's record profit that was just announced came from selling Barclays Global Investors to BlackRock. Nonetheless, Barclays is a first-class operation with great future potential. They picked up the U.S. assets of Lehman for a song and those assets are already reaping great rewards for them. Expect Barclays to start paying a much higher dividend soon.
Secondly, Lloyds is looking good as the U.K.'s housing sector begins to recover along with the British consumer.
Still, you have to consider that the British banks still have a lot of bad assets to deal with and their could be a lot of volatility ahead. Regardless, I see both Barclays and Lloyds being great investments to hold for the long-term, particularly Barclays.
RBS ... they are majority owned by the British Government and wouldn't consider them a wise investment.
HSBC ... they are a great bank but they are also priced that way. Barclays is a better bet.
Good luck!
Disclosure: I own shares of both Barclays and Lloyds.
