The crash of the SVB Financial Group in the U.S. and the crisis at Swiss bank Credit Suisse (NYSE:CS) have shaken the stocks of banks all over the world. UK-based Lloyds Banking Group (GB:LLOY), Barclays (GB:BARC), and HSBC Holdings (GB:HSBA) are no exceptions to that.
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These British banks are currently trading in the red zone as investors’ panic led to a setback in the financial markets. Even though the Bank of England has assured investors of a sound banking system in the country, it is currently weighing the decision to make a further rate hike this week.
he UK banks recovered a little after Credit Suisse accepted a $54 billion loan offer from the Swiss National Bank last week. The markets are expected to open on a positive note this week as UBS Group (NYSE:UBS) has agreed to buy Credit Suisse in a $3.2 billion deal, which is welcomed by governments globally.
Analysts feel the UK banks are in a better position as compared to their competitors due to “tougher regulations.”
A month ago, these banks reported higher earnings in their 2022 annual results. All three, Barclays, HSBC, and Lloyds, posted huge profits but at the same time posted an uncertain outlook over margin pressures. However, the long-term outlook for these stocks remains positive.
Let’s see what the analysts’ views are on these banks.
Lloyds Share Price Forecast
Lloyds’ shares are trading down 1.54% YTD after gaining more than 55% over the last three years. Analysts are confident about the stock given its ability to withstand market volatility while sitting on stronger financial numbers on its balance sheet.
Based on a total of 10 recommendations, LLOY stock has a Moderate Buy rating on TipRanks. It includes seven Buy and three Hold recommendations.
The average target price is 67.43p, which indicates an upside of 45.3% from the current trading price.
What is the Future of Barclays Share Price?
Barclays’ stock has been down by almost 12% in 2023 so far. Due to its higher exposure in international markets, including the U.S., the stock suffered more during the recent happenings. However, analysts believe this has created a more attractive valuation for the stock.
According to TipRanks’ analyst consensus, BARC stock has a Strong Buy rating. This is based on seven Buy and two Hold recommendations.
The average target price of 241.63p indicates a huge upside of 72.67% on the current price. The target price has a high forecast of 270p and a low forecast of 205p.
HSBC Share Price Predictions
One of Europe’s largest banks, HSBC, came as a savior after it bought the UK business of SVB Financial for £1. The bank also assured that, after this deal, the depositor’s money is safe. HSBC’s stock is down more than 3% in the last five days. For HSBC, this deal will enhance their fintech abilities with more exposure in the technology industry.
On TipRanks, HSBA stock has a Moderate Buy rating, based on eight Buy and five Hold recommendations.
The average target price is 748.91p, which is 38.04% higher than the current trading price.
Conclusion
The shares of these UK banks have been volatile just like their global counterparts amid the mini financial disaster. British banks are also facing pressure on their deposits as customers search for higher savings rates.
Despite all of this, analysts have not lost faith in these banks, which are known as stable investment options in the UK market. Apart from some short-term risks, these stocks stand strong with higher profits and a solid balance sheet.
