Major UK banks post significant recovery as markets anticipate strong recovery

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Through Kunal Sawhney, PDG, Kalkine Group

The banking and financial services industry in the UK, without exception, has experienced a wide range of hardships caused by the coronavirus pandemic and its long-lasting after-effects. From the sharp decline in demand for credit to a moderately large reduction in the volume of deposits, these were some of the major concerns for the banking industry in the early days of the pandemic era, which is still ongoing.

Massive job losses have shortened pay scales, tapering sources of income, and suddenly high spending on health and care services from world-class medical facilities have remained a challenge for millions of people. The unanticipated disruption of periodic personal income as well as many business environments has collectively dismayed the banking and financial services industry.

Recently, the banking sector is back on the right track as major UK banks have made a quiet recovery in stock market performance. Much of the appreciation seen in stock prices was due to the large-scale vaccination program, the optimism surrounding vaccinating people against the Covid-19 virus (SARS CoV-2).

Returns up to 75%

Big banks, such as HSBC Holdings Plc, NatWest Group Plc, Barclays Plc, Standard Chartered Plc and Lloyds Banking Group Plc, have experienced almost similar share price growth, separately, over the past six months. Momentary discouragement on the part of investors due to the start of the UK’s third nationwide foreclosure, travel restrictions and repeated unrest in cross-border trade were reflected in the market prices of the aforementioned banking companies, but most have was short lived.

According to historical data available from the London Stock Exchange, shares of Barclays and NatWest Group saw the strongest growth in the past six months, with the former rising just over 75%. Shares of London-based investment bank and financial services giant Barclays amassed a 75.45% gain at GBX 187.98 (April 9, 2021) against the GBX 105.84 share price on the 12th. October 2020.

Over the corresponding term, shares of the Edinburgh-based NatWest group appreciated up to 74.10 percent to 196.65 GBX, compared to 112.95 GBX each. Shares of London-based banking giant HSBC Holdings posted a gain of more than 40%. Shares of market capitalization leader HSBC Holdings rose 41.9% to 437.40 GBX.

On the other hand, shares of major London financial services Lloyds Banking Group rose just over 54% to 43.42 GBX from a market price of 28.07 GBX, while shares of the London bank Standard Chartered were successful in recognizing a 31.27% increase to GBX 504.60 over the GBX 379 brand.

Developments Catalyzing Economic Recovery

Hopes for a high profile recovery in companies and businesses that have experienced a never-before-seen depletion of income in such a short time is another factor that is responsible for the self-induced confidence among investors.

As England begins the second stage of the reopening from Monday April 12, in line with the exit plan presented by Prime Minister Boris Johnson, many business facilities plan to see a silver lining in their respective operations as they resume their services after nearly six hours. months, because many companies had to go out of business after the multilevel system was imposed.

At the same time, the key interest rate oscillating at a historically low level admittedly impacted the profitability of the banking channels at first, but the bankers apparently adapted to the low rate regime and retrospectively modified their offers according to the conditions set by the bank. from England.

Recently, various macroeconomic indicators measuring the production of services, as well as construction, have globally indicated the sharp rise in volumes, thus strengthening the pace of the recovery from the lows caused by the pandemic.

Surveys released by Markit / CIPS measuring the PMI for services, manufacturing and construction in the UK respectively showed signs of recovery as the country prepares to move forward with the planned reopening framework and predefined level of easements.

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Keywords: Natwest Group, HSBC Holdings, Barclays, Lloyds Banking Group, Standard Chartered, UK Banks, Covid-19, Vaccination, Economic Recovery, Stock Market, Bank of England, Banking, Financial Services

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