Lloyds, Barclays and even HSBC have been named as some of the attractive banks to hold, as well as Standard Chartered, with a more positive environment expected in 2017.
Chancellor of the Exchequer Phillip Hammond announced the government had reduced its stake to below 6% and recovered £18bn of the £20.5bn it funnelled into the struggling bank during the financial crisis.
US investment firm Blackrock is now the biggest shareholder of Lloyds, and the high street bank’s return to focus on its consumer and SME base has made it an attractive, lower risk prospect for investors.
Investment manager Darron Preston, head of UK equity at European Wealth, said: “I’m not averse to the government reducing its stake in the bank, I think the government should stay out of private listed companies, any reduction is welcome.”
The new management at Lloyds, Preston said, have realised the bank performs better as “core basic lender” focusing on its consumer and SME base while eschewing investment banks which makes it lower risk.
“I’m very positive and have been very positive about the value present in banks. We are investing in banks and holding on to them. We are looking very closely at increasing our hold of RBS in particular, and holding onto HSBC and also Standard Chartered,” Preston added.
