By Malcolm Stacey | Friday 3 March 2017
Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hello Share Trundlers. It’s only with extreme caution that I commend any British banks to your eagle eye, having lost a stack of my own money on them even since 2007. But I am rather more hopeful about all of the big British ones now.
A limit has just been set on the time people can go on claiming PPI from the banks which have paid out a staggering £26 billion so far. This will end a huge burden on banks, who’ve been setting aside more billions for future pay-outs.
My favourite bank to invest in is probably Lloyds (LLOY). It pays a dividend and is increasing profits impressively. Its performance shines in comparison to the poor figures offered by the Honkers Bonkers bank (HSBA) recently.
But I don’t want to overlook Royal Bank of Scotland (RBS). It suddenly looks more promising as an investment since it now plans to keep hold of Williams & Glyn, even if the main reason is possibly that nobody else wants it.
RBS faces a big settlement with the USA’s Department of Justice over mis-selling allegations of so long ago. But RBS is still a monster outfit and the settlement will not cause the bank to reel in terminal pain - far from it.
Consequently, RBS’s share price has been ticking up steadily and is now around 245p. A big German broker - Berenberg - has looked at the situation and reckons the share is worth nearer 285p, setting a target of 275p.
There is also a possibility that dividends may be paid again. On these being announced, expect the share price to jump smartly.
The bank is undergoing a big cost cutting exercise. And when the bank rate finally goes up, which is going to happen some time as inflation rises, then profits should thrive again.
And now it’s over to the Punter’s Return.
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