Financials rallied in early trading following the sector's drag on the FTSE 100 yesterday, as Legal & General, RBS, Lloyds Banking Group and Barclays spurred forwards.
However, the banks failed to push the FTSE into positive territory, with the blue-chip index dipping 33.69 points (-0.81%) to 4,101.06.
L&G lifted 5.30 points (11.96%) to 49.60 having released an extraordinary statement regarding its capital position. The insurer giant has more than doubled credit default reserves in its annuity portfolio to £1.2bn in response to concerns over potential corporate bond defaults.
Despite rumored job cuts of between 10,000 and 20,000 and predicted losses of £30bn at RBS, the bank's share price saw an upswing of 0.60 points (2.94%) to 21.00 as Odey Asset Management's Crispin Odey - renowned bear on the banking sector - changed to a bullish stance on the bank.
Odey believes both RBS and Barclays have sufficient capital to escape nationalisation if relieved of their toxic assets. Barclays gained 3.60 points (3.71%) 100.70.
Meanwhile, Lloyds Banking Group rallied slightly on the Government's announcement it doesn't plant to take full control of the bank, despite forecasts of a £10bn loss in the mortgage arm of HBOS. Share prices were up 2.30 (4.08%) to 58.70.IFAonline
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