FTSE 350 Review: Are bank shares still worth owning?
Investors may well ask how cheap bank shares need to become before anyone decides to buy them again. According to Numis, the sector average price/earnings (PE) ratio is heading towards 5 for the UK’s domestic banks. With interest rate cuts looking at least plausible this year, the associated shrinkage in net margins – and the possibility of a further slowdown in economic growth ahead of those base rate cuts – mean you could be forgiven for thinking that UK banks' best days are behind them. Inevitably, the outlook is more nuanced than this scenario implies. A...
