The state of banks' financial health remains "obscure" and they are not worth investing clients' savings in, fund manager Liontrust has said.
Liontrust joins the Association of British Insurers (ABI) in raising concern over the banking industry.
This week the ABI said institutions are reluctant to invest in high street banks because of increasing risks and shrinking returns.
Jan Luthman, co-manager of the Liontrust Macro Equity Income fund which has no exposure to banks, said he views banks as being driven by political and regulatory imperatives, rather than free market forces, while the true state of their financial health remains obscure.
"The Bank' of England's governor, Sir Mervyn King, has said that banks should ‘drop the pretence that their debts will be repaid' and that they lack sufficient capital to absorb undeclared losses, which implies an eventual requirement to raise further capital.
"Meanwhile, the Bank's Financial Policy Committee has said that banks should restrain cash dividends in order to build equity through retained earnings. Hardly positive for shareholders.
"Finally, over all of this hovers the huge black cloud of eurozone sovereign debt and the exposure, both directly and indirectly, of UK banks. To us, this is not an appropriate environment in which to risk our clients' savings."
Underperformance still present – for now
Regtech or fintech
15% increase in number of claims paid
Open architecture philosophy
Inflation above 2% for first this this year