Lloyds, Barclays and RBS share prices ahead of Brexit
Brexit continues to hinder the performance of British lenders, with uncertainty stifling investment and squeezing margins on UK mortgage margins.
Technical analysis from our experts
'A move above 160p would put it above the July and September peaks, providing a more bullish view. A drop below 145p reaffirms the bearish view and brings the August low at 135p into play.'
Read the full detailed analysis in our platform now
No-deal Brexit will hit domestically focused Lloyds hardest
Lloyds has taken strides to become a more domestically focused retail bank, tying its performance more closely to that of the wider UK economy.
In the event of Britain bailing out of the EU without a deal, the UK economy is predicted to suffer greatly in the short term, which would spell disaster for British lenders, with Lloyds likely to feel the impact more acutely than its rivals.
Barclays cuts costs ahead of Brexit
Earlier this year, Barclays recorded an 82% rise in half-year pre-tax profits despite ongoing Brexit uncertainty applying downward pressure on its share price
However, it is worth noting that the surge in profits, reflected the lack of additional charges which significantly hurt earnings during the same period last year, with the bank forced to settle with US authorities over its involvement in selling mortgage-backed securities ahead of the financial crisis.
Barclays and other UK lenders are not only contending with the uncertainty caused by Brexit, but also a competitive mortgage market and the threat of a global economic slowdown.
Consequently, Barclays is focused on cutting costs in second half of this year, with the lender shedding more than 3000 jobs across its operations in its second quarter (Q2) alone.
‘Management focus on cost control remains a priority, and we expect to reduce expenses to below £13.6 billion for 2019,’ Barclays Group CEO Jes Staley said.
Alison Rose to navigate RBS post-Brexit
In September, RBS announced that Alison Rose will take over from Ross McEwan as CEO – making her the first women to lead one of Britain’s top banks.
Rose will take the helm in November, which will see her forced to navigate the bank through a post-Brexit landscape, so long as the 31 October deadline isn’t push back.
Her job will be made all the more difficult by the government still controlling a significant stake in RBS and, depending on the type of Brexit the UK ultimately gets, progress towards privatisation could be hampered.
‘This is an exciting time as we enter a new chapter for this bank,’ Rose said. ‘Our industry is facing a series of challenges; from the ongoing economic and political uncertainty to shifts in the behaviour and expectations of our customers, driven by rapid advances in technology.’
‘It will be my priority to make sure we are ready to meet these challenges and build the best bank for families, businesses and communities,’ she added.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Trading around Brexit
Find out how the UK’s exit from the EU continues to affect traders, and discover:
- The unique opportunities in a ‘hard’ and ‘soft’ Brexit
- The markets you should be watching
- Everything that’s happened so far
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.