Banking stocks to explore as BoE ponders increasing interest rate

January 30, 2023 11:04 AM GMT | By Manu Shankar
Follow us on Google News:


  • The Bank of England could raise the interest rates to 4%.
  • Currently, the interest rates sit at 3.5%.
  • It is anticipated that BoE may further increase the interest rates pushing it to 4.5% in March.

Threadneedle Street will be in the thick of things this week as the Bank of England (BoE) is all set to raise the interest rates for the 10th time in succession. It is anticipated that the Central Bank will raise the interest rates by 0.5 percentage points.

Currently, the interest rate stands at 3.5% - the highest since 2008. The Bank’s monetary policy committee (MPC) has been steadily increasing since December 2021 as the Bank continues to find a delicate balance between controlling the soaring inflation and the risk that its actions exacerbate an economic downturn.

According to a poll by Reuters, the interest is expected to increase further in the next MPC meeting in March. According to the poll, the interest is likely to touch 4.25% in March and may touch 4.5% by mid-year.

Homebuyers, however, may breathe a sigh of relief as the fixed mortgage rates have started to drop in recent weeks. Having said that, they may well be caught in two minds about whether it is the right time to buy a house or not.  

But not all is gloomy as the BoE nears to increase the interest rates. An increase in interest rates may result in increasing the savings rates. However, one can’t take this for granted, as banks are not obliged to raise savings rates. At the same time, they also don’t need to pass on the full rate rise but only a fraction of it.

Amid this, Kalkine Media explores three FTSE 100-listed banking stocks and how they are faring on Monday.

Natwest Group (LON:NWG)

NatWest Group Plc is the largest commercial bank operating in the United Kingdom. NWG, which connects over 19 million customers in Britain and Ireland as of 30 January, holds a market cap of £29,838 million and is trading at GBX 305.50. The NWG stock was down by 0.97% as of 8:05 am GMT on Monday. The FTSE 100 constituent enjoyed positive YTD and one-year returns of 15.16% and 16.98%, respectively.

Barclays Plc (LON: BARC)

Barclays Plc is yet another leading bank operating in Britain, offering banking and financial services to its customers. BARC holds a market cap of £ 29,485.71 million and an EPS of 0.38. Just like Natwest Group, BARC shares too were down by 0.90% at GBX 184.10 as of 08:14 am GMT on Monday. Both its YTD and 12-month return stood in the negative zone at -16.21% and -6.44%, respectively.


HSBC Holdings Plc is the second largest Bank in Europe, serving over 40 million customers globally. Its vast network caters to 64 countries and territories across Africa, Europe, Asia, North America, Oceania, and South America. The FTSE 100 constituent wasn’t seeing a fruitful day as it was down by -0.93% as of 30 January. HSBA enjoyed a market cap of £ 119,909.85 million, trading at GBX 594.90 at 08:19 am GMT. HSBA had a positive EPS of 0.62, with both 12-month returns and YTD returns being in a positive zone at 12.40% and 15.14%, respectively.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Limited, Company No. 12643132 (Kalkine Media, we or us) and is available for personal and non-commercial use only. Kalkine Media is an appointed representative of Kalkine Limited, who is authorized and regulated by the FCA (FRN: 579414). The non-personalised advice given by Kalkine Media through its Content does not in any way endorse or recommend individuals, investment products or services suitable for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a qualified financial planner and/or adviser. No liability is accepted by Kalkine Media or Kalkine Limited and/or any of its employees/officers, for any investment loss, or any other loss or detriment experienced by you for any investment decision, whether consequent to, or in any way related to this Content, the provision of which is a regulated activity. Kalkine Media does not intend to exclude any liability which is not permitted to be excluded under applicable law or regulation. Some of the Content on this website may be sponsored/non-sponsored, as applicable. However, on the date of publication of any such Content, none of the employees and/or associates of Kalkine Media hold positions in any of the stocks covered by Kalkine Media through its Content. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music/video that may be used in the Content are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music or video used in the Content unless stated otherwise. The images/music/video that may be used in the Content are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.