What’s the outlook for UK bank share prices ahead of first-half earnings?

UK banks have seen their uptrends stall, with some caution regarding the outlook for the UK reflected in declines for Lloyds’ and Barclays’ share prices.

What’s the outlook for UK banks?

The UK economic recovery appears to have slowed, and this is worrying news for UK bank stocks. Barclays, NatWest and Lloyds are all highly dependent on the British economy and consumer/business spending. A slowdown here would be reflected in earnings and would pose a risk to the ongoing rally in bank stocks that has held up fairly well since October last year.

UK banks have been bolstered by news that the Bank of England (BoE) has removed the rules around dividends and buybacks, but their shares have yet to respond in a positive fashion. Indeed, the sector has seen a pullback since its peak in early June, although the overall uptrend is still intact. Paradoxically, this may be a good thing as we prepare for first-half earnings from UK-listed banks, since it indicates that expectations around performance have been trimmed, allowing for the possibility that earnings will be well-received.

UK banks share price – technical analysis

  1. Barclays
  2. Lloyds
  3. NatWest

Barclays share price

The Barclays share price peaked for the time being in April around 190p, and since then a steady decline has taken place.

However, the price appears to have found support around 160p, heading towards the 200-day simple moving average (SMA) at 156p and edging higher. The key now is a break above short-term trendline resistance from late June, which would suggest a rally above 170p, in order to establish a more bullish view.

Learn more on how to buy, sell and short Barclays shares

Lloyds share price

Lloyds’ overall uptrend remains intact despite some weakness since the beginning of June.

The shares remain in a descending channel from the June high, with a move above 46.8p required to signal a breakout is in progress. This would also signal that the bounce from 43.3p has created a higher low, helping to revive the uptrend and negating the negative view created by the drop below the 100-day SMA (44.9p).


Learn more on how to buy, sell and short Lloyds shares

NatWest share price

For NatWest, the uptrend has paused, with gains stalling around 210p since the beginning of June.

Dips into the 190p zone have found support, so another bounce towards 210p seems likely, with a more long-term bullish view requiring a push above (and daily close above) 210p.

Learn more on how to buy, sell and short NatWest shares

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.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.