World Economy
0

Shares of 5 Big UK Banks Up by $14b

Shares of 5 Big UK Banks Up by $14b Shares of 5 Big UK Banks Up by $14b

Shares in British banks jumped on Friday as the Conservative party looked set to form the next government, removing fears of a break-up of the biggest among them and further hikes in a tax on their assets.

The market value of the five biggest British banks had increased by 9.1 billion pounds ($14b) by 1110 GMT, fuelled by relief at a clear election outcome in favor of a party many senior bankers see as more business-friendly, Reuters reported.

Shares in Lloyds were up 6.7 percent, the highest level since 2008 when the government began a bail-out that put 41 percent of the bank in state hands.

The increase gives the state a 2.3 billion profit on its 20 percent remaining stake based on current share prices and will encourage the Conservatives to go ahead with their pledge to sell 9 billion pounds worth in shares over the next year, including a discounted offer to private retail investors.

RBS, now 80 percent government-owned, was up 6.4 percent, although taxpayers are still sitting on a 13.4 billion pound loss on the RBS investment.

Other banks' shares rose too, with Barclays up 4.9 percent and HSBC and Standard Chartered rising by 1.3 percent and 1.6 percent respectively.

The opposition Labor party had said it would increase the bank levy, based on banks' assets, by 800 million pounds to pay for spending on childcare and job guarantees if it won the election.

The British Bankers Association urged the new government to ensure that UK banks remain competitive with overseas rivals, a coded plea for what many bankers regard as excessive regulation of the industry since the crisis to be toned down. "We need to focus now on implementing the reforms that have already been legislated for, and ensure that banking – our biggest export industry – remains globally competitive," BBA Chief Executive Anthony Browne said.

 

Financialtribune.com