Royal Bank Of Scotland, Barclays, Lloyds, Hit By Market Turmoil

The shock-waves from Wall Street have officially made their way across the pond this morning.  Three of the country’s top banks may require an investment of 45 billion pounds, the equivalent of $79 billion, according to a Bloomberg report.  The brunt of this news was borne by Royal Bank of Scotland (RBS), which is perceived to be the weakest of the three.

Shares of the Edinburgh-based RBS tanked over 33% in early trading Tuesday, taking the shares down to a precarious $1.76.  Adding to the fall-off, S&P has cut RBS’ rating.

Elsewhere, Barclays (BCS) is down 13.5% thus far today, and Lloyds (LYG) is lower by 10%.  Zacks senior foreign bank industry analyst Ann Heffron, CFA does not follow RBS, but does cover Barclays and Lloyds.  In her latest BCS report, she had this to say:

“[T]he turmoil in the US subprime and other credit markets should continue to take its toll on revenues and earnings at Barclays Capital. Barclays wrote off £1.635 billion in subprime-related exposure in 2007 and an additional £1.108 billion in 2008’s first half.”

Posted in Categories: Contributor, External Research, Financial, Stocks, USA.

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