More than £71bn has been wiped off the market value of British banking stocks in the 12 months since the start of Northern Rock's downfall.
A Digital Look study suggests Northern Rock’s emergency funding announcement on 14 September 2007 was a tipping point for UK banks, eventually “devastating” the sector.
Digital Look says UK banks have now fallen £136bn in value from their three-year highs, and remain hugely volatile.
“Daily share price changes of 5% or 10% are now getting common,” Digital Look director Andy Yates says.
“It basically shows that investors haven’t got any firm grip on where banks are going or what write-downs are still to come.
“A lot of private investors have made a packet from trading in and out of bank shares but for long-term investors the story so far has been a little more grim.”
However, Yates says banks with larger emerging markets exposure – such as HSBC and Standard Chartered – have weathered the storm far better.
“Even in the UK’s mortgage market not all is doom and gloom,” he says.
“We know that banks that can afford to lend to the mortgage market are winning business at mouth-watering margins.
“There is some evidence that we have now turned a corner and the market may have finally bottomed out.”
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