Banks

triumph41

With this present Goverment and the last Goverment propping up the main British banks with as much money as they need, no matter what they do wrong. Europe to is propping up its bank with big hand outs.

My question is, is it now a good time to buy shares in the four main British banks RBS, NAT WEST,BARCLAYS, LLOYDS,say £2500 in shares in each bank.

What is the cheapest way to buy shares in them?.What is there dividened paying.

Just a thought all be it a crazy one?.

Tony:beer:

gadgetmind

I hold some Lloyds (ordinaries and prefs) and have had HSBC on my watch list for a while.The Libor scandal means that I'll probably invest elsewhere for now.

I wouldn't be comfortable with more than 5% of my portfolio in banks, and couldn't sleep at night with more than 10% in that sector.

You can see dividend record etc. on sites such as Dividend Investor and Digital Look.

http://dividendinvestor.co.uk/?chk=4bc6a1341130695&symbol=lloy&submit=GO

http://www.digitallook.com/dlmedia/security.cgi?csi=10056&username=&ac=

Dividends have been choppy over recent years due to massive dilution and EU dividend blocking laws for state aided banks.

Look before you leap.

gadgetmind

You may like this thread.

http://boards.fool.co.uk/is-this-an-entry-point-for-bank-shares-12586414.aspx?sort=whole#12586414

Reaper

Despite all the falls I'm still bearish on the banks. I would not buy ordinary shares myself but have been mulling over preference shares which are a bit safer.

Be aware though bank preference shares are typically "Non Cumulative" which means they can stop payments without having to make it up again later, unlike most others.

One I have been mulling over it the Santander UK preference share (SAN) but haven't gone for it yet. If you look at it beware the catch that it quotes its return gross rather than net unlike every other share on the market which is a bit cheeky, so the return is good rather than stellar.

gadgetmind

Reaper wrote: »

I would not buy ordinary shares myself but have been mulling over preference shares which are a bit safer.

They are senior to ordinary shares (so paid out first if a bank fails and is liquidated) but behind bonds. However, governments are playing fastand loose with debt seniority, so anything is possible.

Be aware though bank preference shares are typically "Non Cumulative" which means they can stop payments without having to make it up again later, unlike most others.

Some is, some isn't, and the same holds true regards redemption. Some of the rules for when some debt can be redeemed or converted to libor+whatever are complex!

One I have been mulling over it the Santander UK preference share (SAN) but haven't gone for it yet. If you look at it beware the catch that it quotes its return gross rather than net unlike every other share on the market which is a bit cheeky, so the return is good rather than stellar.

Fixed interest can be complex, but it's well worth getting your head around it IMO. But ever issue is slightly different, so you really do need to know what you're buying.

I've looked at SAN a few times, but currently just hold NWBD and LLPC. I've also got NAWI on my watch list as things could get interesting for that if it doesn't get called (likely) next February. At that point the price should drop as it steps "up" to libor+0.5%, which will then make it an interesting leveraged interest linked bond for anyone bold enough to wait it out.