5 banking stocks to explore in December - Kalkine Media

December 09, 2022 12:49 PM GMT | By Abhishek Sharma
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Highlights:

  • Financial markets in the country are betting on a 78% chance that the central bank will go for a 50 bps hike in interest rates.
  • A rise in interest rates will also push the mortgage deals higher.

With inflation figures rising to record levels and projections of a further increase in the coming months, more interest rates seem to be on the table for the Bank of England (BoE). According to a Reuters poll, financial markets in the country are betting on a 78% chance that the central bank will go for a 50 bps hike in interest rates when it meets next week.

If the BoE goes for a half-percentage point hike, its interest rates will reach 3.5%. On the other hand, the chances of the interest rates touching 3.75% stand at 22%.

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The respondents included 54 economists, a majority of whom expect a 50 bps hike. Only a few have projected a larger hike of 75 bps. This also indicates that the days of cheap mortgage rates may be over for homebuyers. A rise in interest rates will also push the mortgage deals higher.

Let's look at some banking stocks in the wake of this information.

HSBC Holdings plc (LON: HSBA)

The leading banking and financial services provider has a market cap of £98,903.15 million and belongs to the FTSE 100 index. It is among the biggest lenders in Europe. The stock price has appreciated 12.47% in the past year, and its EPS stands at 0.62 as of 9 December. Shares of HSBC were trading at GBX 496.95, up 0.33% as of 8:17 am GMT on Friday.

NatWest Group plc (LON: NWG)

The Edinburgh-headquartered lender enjoys a market cap of £25,029.62 million, and its EPS stands at 0.25 as of 9 December 2022. Over the past year, NatWest Group has given a return of 9.26% to investors. Shares of the company traded 0.58% higher at GBX 260.50 as of 8:14 am GMT on Friday.

Lloyds Banking Group Plc (LON: LLOY)

Lloyds is one of the UK's biggest banking and financial services providers. Over the past year, its share value has declined by 2.50%. The FTSE 100 constituent boasts a market cap of £30,880.79 million, and its EPS stands at 0.08 as of 9 December 2022. LLOY shares were trading at GBX 46.18, up 0.61% at 8:17 am GMT on Friday.

Barclays Plc (LON: BARC)

Another FTSE 100-listed British lender is Barclays, which holds a market cap of £24,880.70 million. The stock has an EPS of 0.38, and its share value has depreciated by more than 15% since 9 December. The lender's shares traded at GBX 157.58, up 0.50% as of 8:23 am GMT on Friday.

Standard Chartered Plc (LON: STAN)

Standard Chartered is a British multinational lender. It offers services in several countries and holds a market cap of £17,119.55 million. The stock has given a return of 36.40% to investors over the past year, while its EPS stands at 0.61 as of 9 December 2022. Shares of the company traded at GBX 591.20, down 0.07% as of 8:26 am GMT on Friday.

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.


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