Investec recommends to "overweight" Scotland-exposed banks ahead of vote

11th Sep 2014 11:43

Investec has recommended investors to "overweight banks" exposed to Scotland given its prediction of the 'no' campaign coming out on top in the Scottish referendum.The broker highlighted yet another opinion poll - Survation survey of 1,000 Scots released on Wednesday - has come out showing that 'no' led the way with 53% of the votes against 47% for 'yes'.It noted that this has driven the bookies' odds out to 1/4 for 'no' winning and 3/1 for 'yes', according to data from Oddschecker."We reaffirm our call for those with a short-term (eight-day) investment horizon to overweight banks with actual or perceived exposure to Scotland: Lloyds ('buy'), TSB ('hold') and RBS ('hold')," said analyst Ian Gordon.He said this call is "predicated on an expectation of a 'no' vote" when the referendum takes place on 18 September.Nevertheless, banks such as Lloyds and RBS have both come out and said that, in the event of a 'yes' vote, they would re-domicile to England but that this move would not affect everyday banking services."In our view, the various bank statements offer a reminder that the operational impact of a 'yes' vote should be contained," Gordon said.Out of the three mentioned banks, Gordon said that TSB has the greatest share of existing businesses in Scotland, which account for 24% of its franchise residential mortgage book as of 31 March. However, he said that "this is of very limited concern to us".RBS and Lloyds were both trading 1.3% higher on Thursday morning in London, while TSB gained 0.6%