Banking stocks may not be as attractive as some fund managers believe, according to Newton Investment Management.
Simon Pryke, banking analyst at Newton, says the credit crunch is far from over and it would be wise to remain bearish on banks. “I think we’re closer to the start of the credit crunch than the end,” he says, “ and we have little idea how banks’ mortgage books will develop.” Pryke says buy-to-let lending is a considerable unknown variable at the moment, as no one has experienced buy-to-let lending on its current scale. “We’ve seen buy-to-let growth from less than 1% of UK lending to over 10% in the last ten years,” he explains. “The problem is we really don’t know how bad buy-to-let mor...
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