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Highlights
- NatWest announced plans to buy back shares worth £1.2 billion from the UK government to return to majority private ownership.
- Barclays has been facing regulatory scrutiny for exceeding the permitted limit on sales of structured products.
- HSBC, amid pressure to suspend its businesses in Russia, has removed any reference to the war in Ukraine from its research reports.
The ongoing conflict between Russia and Ukraine has negatively impacted the global economic scenario, as Russia is one of the major economies supplying various commodities to the rest of the world.
The London benchmark index FTSE 100 has been showing a volatile trend since the start of the war. Bank of England’s governor Andrew Bailey has warned that shock to real income from sharply surging commodity and energy prices will be worse than in any year in the 1970s, in the wake of the ongoing war between Russia and Ukraine.
However, there has been some respite for the investors of late, as oil prices declined amid some progress in Ukraine peace talks. At the same time, there was the concern of weaker fuel demand in China due to the lockdown in Shanghai, a financial and manufacturing hub, to curb a surge in Covid cases.
Let us look at three FTSE 100- listed banking stocks - NatWest Group Plc, Barclays Plc and HSBC Holdings Plc that are in the limelight today.
NatWest Group Plc (LON: NWG)
NatWest Group Plc is one of the largest commercial and retail banks, with a market cap of £24,697.83 million as of 29 March 2022.
The Royal Bank of Scotland’s holding bank has announced plans to buy back shares worth £1.2 billion from the UK government. The development would lead the bank to return to majority private ownership by diluting government stake below 50%. The government’s stake had peaked at 84% in 2009 after the bank received a £45 billion bailout from taxpayers for a 50.6% stake following the 2008 financial crisis.
The bank will make an off market buying of 549,851,147 ordinary shares, equivalent to 4.91%, from HM Treasury at Friday’s closing price of 220.5p, and the deal will be completed on Wednesday, 30 March. At Friday, 25 March closing price, the government’s remaining stake of around 48.06% in the bank is valued at £11.9 billion.
The share price of the FTSE100-listed bank has appreciated by 14.64% over the last one year as of 29 March 2022. The stock currently trades at GBX220.00, marginally up by 0.09% at 9:16 AM GMT on 29 March 2022.
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Barclays Plc (LON: BARC)
The multinational bank Barclays Plc, with a market cap of £26,894.10 million, has been facing regulatory scrutiny for exceeding the US limit on sales of structured products.
Some of these structured products’ popularity surged after Russia’s invasion of Ukraine. The bank said that it would buy back structured notes at an estimated loss of around £450 million after exceeding the limit of US$15.2 billion to US$20.8 billion.
The bank also stated that it will have to postpone its £1 billion share buyback plans due to this huge loss and is also assessing the impact of the matter on its prior period financial statement.
The share price of the FTSE100-listed bank has given a negative return of 15.74% over the last one year as of 28 March 2022. The stock of the bank was currently trading GBX153.96, down by 4.10% at 9:23 AM GMT on 29 March 2022.
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HSBC Holdings Plc (LON: HSBA)
The multinational investment banking and financial services company HSBC Holdings Plc holds a market cap of £104,802.26 million as of 29 March 2022.
The bank has recently made changes in its research report to remove any reference to war in Ukraine, amid pressure to suspend its businesses in Russia. Its committee that reviews all research reports sent to clients has revised various reports to soften the language on the escalating geopolitical tension.
The share price of the FTSE100-listed bank has appreciated by 22.71% over the last one year as of 28 March 2022. The stock price was currently trading at GBX522.20, up by 0.68% at 9:26 AM GMT on 29 March 2022.
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.
