Not sure if this thread will catch on, because no-one here seems to have much to say about individual british banks, but thought i would add this header to see if we could discuss dividend yields, exposure to sup-prime, good ones, bad ones, take-over targets, when the crisis will end? do you think they have learnt their lesson? I, for one, as a property developer have seen first hand how much stricter they have become with lending habits, struggling to get decent rates for re-mortgaging, basically they appear scared to lend to anyone.

Tend to agree, if you wish to conserve cash, just cancel the dividend. Just pay the minimal yearly dividend which will enable the Company to maintain Trustee status. Otherwise you are dividing up the same pie but into smaller pieces. Perhaps paying the dividend in shares means that certain income funds do not have to sell their holdings.

halifax- I am following stock from a take over angle but, against the current housing market background we could see the sp fall further yet in short term.

I agree in the absence of bid talk sp is likely to drift down towards 130p. However their is an opportunity at that level to acquire a bank network very cheaply, who knows even CTT may be a candidate as they are applying for a banking licence and are heavily into sub prime lending!

Re: B&B's divi - Is the stock dividend subject to income tax?

mm. interesting thought.CTT seem mainly to be in personal finance and a merger of the 2 business would diversify the earnings base. I see CTT have been quick off the mark with their rights issue. No dithering there.

brianboru, I believe it is. Regarded as stock dividend and amount of tax based on value of shares issued at the time. Value stated by the Company at the time. Never liked them myself, much prefer to receive cash and makes administration easier for the shareholder.

brianboru, should also say that shares issued normally represent the net equivalent after tax but they have to go in the tax return in case they are taxable at the higher rate. Still worth a check in case this government has slipped some changes in somewhere.

The good news is BB rapidly becoming a penny share with an ex rights sp of around 120p based on current price.

From trades section noticed that someone sold or shorted 39 million RBS shares today, that's quite a few!

I was surprised that lloy didn't take the opportunity to have a rights issue, over the next 6/12 month's there will be plenty of investment situations both in the UK and abroad. If lloy had stated this as the reason for a rights issue, I think the city would have looked on lloy very favourably.

BB. or AL. would be candidates in the UK, but I would think lloy would want to diversify abroad.

lloy is my only holding at present in sector and I did wonder myself weather they would follow suit with a rights issue. Who knows, perhaps they are in the queue. If any acquisition did look favourable they could ask shareholders for funds at the same time. To the surprise of the market lloy and Barc both recently increased their dividends so I wonder if they would have done this if they were thinking of having a rights issue. In the case of Barc, there has been speculation that they may raise futher funds by selling a stake to a sovereign wealth fund.

like you lloy is my only holding in the banking sector, I had a plan to buy into RBS but have changed my mind after reading that Sandy Chen from Panmure Gordon has just slapped a 190p price target on them. He is someone who has made very good calls throughout this credit crunch. It's a hard call now as to which other bank to invest in, still more pain to come I fear.

I certainly wouldn't buy into a bank that was going to pay out future dividends in shares. Doesn't leave alot of choice really, I will top up on more lloy soon hopefully.

Nobody on the thread seems to be paying much attention to HSBC. Their share price is pretty much where it was before the credit crunch hit and seems to be one of the better investments in the sector.

why have rbs tanked today? i know the rights issue will reduce the SP but even so isn't this price a bit low. i have noted Sandy chen's comments and will leave on watch list as maybe further to fall i was just wondering why?
Alex

This is because the rights issue is seen as a dire decision or last resort to raise money. This is not normally a route taken by banks. The credit crunch is still far from over and further writedowns can certainly be expected.

Barclays unveils 1 bln pound credit-crunch hit, Q1 profits fall




Barclays Capital remained profitable overall during the period.

Barclays added that it expects its Tier One equity and capital ratios to be 'slightly lower' at the end of June than the 7.6 percent and 5.1 percent reported at the end of December.


The bank, widely seen as likely to follow rivals Royal Bank of Scotland Group PLC, HBOS PLC, and Bradford & Bingley PLC in launching a rights issue to bolster its capital, said the ratios would reach their target levels of 7.25 percent and 5.25 percent respectively 'in time'.

5.1% is dangerously close to the minimum demanded by the FSA under capital adequacy rules of 5%.

Barclays state they are keeping their options open as regards capital raising.

Alex, the price has been adjusted because of the rights issue (RBSN presently trading at 68p/68.25p).

I should add that shareholders who have not yet received their rights issue documents will be selling some of their existing holding to pay for the new shares, rather than wait to receive/deal the rights document. I imagine that the sp will settle and rise a little over the next few days, but then again........ Sand Chen might just be right!