Proactive Investors - Is it time to buy Lloyds Banking Group PLC after the rout in the financial sector that has seen 8% wiped from its value in the past week and 13% in the last month?
According to Goldman Sachs, the European banking sector is healthy and well-capitalised.
As such the sell-off across the industry in the UK may offer what Goldman described as “upside opportunities” in the wake of the sell-off prompted by the failure of Silicon Valley Bank.
However, it wasn’t specific on where it currently sees value. It said: “The risk of direct banking sector contagion appears limited, as European banks’ exposure to US deposits is low, and the Euro area and UK banking systems are well capitalised with ample liquidity.”
However, it also provided this note of caution in a note to clients: “The US financial stress could lead to European banks curtailing lending to the real economy and therefore tighten broader financial conditions, amplifying the growth drag already underway.”
At 11.45 am, the shares were trading sideways at 47.43p – well shy of the consensus valuation of 65p. Of the 21 banks and brokerages following Lloyds, 17 are positive on the stock in the black horse bank.