Broker snap: Sell the banks says Seymour

15th Mar 2010 12:38

Broker Seymour Pierce has written a bearish assessment of the prospects for UK banks, with sell ratings for Lloyds, Royal Bank of Scotland and Barclays.The broker expects the banks will see more revenue disappointment before rebuilding their profitability and believes expectations for banking income growth are far too optimistic.Its forecasts for revenue are on average 10% below consensus revenue expectations for 2012, with these three banks, in particular, giving the greatest scope for disappointment."Although margins peaked four to six years after bad debts peaked in the mid-nineties, this will be a hard trick to repeat in this recovery, and we are currently seeing 'peak margins' now," Seymour Pierce said.