Banks are under pressure at the moment, after more losses and analyst downgrades.
France's biggest bank, BNP Paribas, unsettled the sector with news of an unexpected €710m loss at its CIB investment banking business. Part of this was due to its exposure to the alleged fraud perpetrated by Wall Street financier Bernard Madoff.
The Paribas news follows yesterday's losses from Goldman Sachs. Meanwhile Deutsche Bank has just issued a sell note on Lloyds TSB, down 0.7p to 127.3p, ahead of the completion of its takeover of HBOS, down 2.5p at 69.4p. Deutsche said:
"HBOS' recent trading update suggested a £2bn pre-tax loss in October and November, substantially driven by corporate loan losses. We are reducing earnings forecasts for higher bad debts, financial services compensation scheme costs and lost payment protection insurance revenues in particular and see the combined group as little better than break even in 2009 (though forecast risk is high at present, we believe) and that capital uncertainties will restrain share performance. Our 110p target price is reduced from 180p; [we move to] sell from hold."
Ironically, an announcement that Deutsche will not redeem a 2014 subordinated bond at the first scheduled call also unsettled the market.
Meanwhile HSBC is down 40.25p at 674.75p on continuing concern about a possible cash call, even though some analysts have dismissed the idea.
Elsewhere housebuilder Taylor Wimpey added 0.7p to 10.5p - a 7% increase - after a report in Building magazine that the company's chief executive Peter Redfern had written a letter to staff in the course of which he suggested its debt renogiations could be concluded by February.
