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Oct 9 2019, 06:45 IST/BST
Banks
Strategic updates the main catalyst for re-ratings
- Sectors : Banks
- Companies : Bank of Ireland | Virgin Money UK | permanent tsb Group | RBS | Lloyds Banking Group | AIB Group
Ratings
Ratings and price correct at time of issue
| Company | Rating | Date | Previous Rating | Date | Closing Price |
|---|---|---|---|---|---|
| AIB Group | OUTPERFORM | 23/01/19 | Neutral | 14/08/18 | 260c |
| Bank of Ireland | OUTPERFORM | 11/03/13 | Neutral | 14/08/12 | 367c |
| Virgin Money UK | NEUTRAL | 28/05/19 | N/A | N/A | 107p |
| Lloyds Banking Group | OUTPERFORM | 28/05/19 | Neutral | 14/02/18 | 51.7p |
| permanent tsb Group | NEUTRAL | 06/03/19 | Outperform | 01/08/18 | 122c |
| RBS | NEUTRAL | 11/02/19 | N/A | N/A | 195p |
DAVY VIEW
On a year-to-date basis, Irish banks and CYBG continue to significantly underperform the SX7P index; in contrast, Lloyds Banking Group (LLOY) and RBS have modestly outperformed the index. The de-rating reflects a range of concerns stretching from Brexit to sustainable levels of returns in the context of the interest rate and competitive environment. While the probability of a ‘hard Brexit’ has receded, we believe that addressing concerns on sustainable returns is a more pertinent catalyst for potential re-ratings, with full-year results in late Q1 2020 the likely timeframe.
