Investors in Lloyds Banking Group PLC (LSE:LLOY) and London’s other leading banks never had too much fear, that’s according to stockbroker RBC Brewin Dolphin, which today described a Lehman-like collapse of Credit Suisse Group AG (NYSE:CS) as “almost inconceivable”.
Moreover, the broker downplayed the chances of similar events in the UK, citing tougher regulation on the likes of Lloyds and Barclays PLC (LSE:BARC).
It is perhaps among the factors helped shares in Lloyds, Barclays, NatWest Group PLC (LSE:NWG) and HSBC Holdings PLC (LSE:HSBA) in recovery mode on Thursday, after all four were dented yesterday.
“Sentiment has hit share prices,” said investment manager Rob Burgeman said, “the regulatory regime in the UK and Europe is far tougher and unlikely to slacken any time soon”.
Burgeman added the news flow over the coming weeks “will make for volatile markets,” with the European Central Bank raising interest rates by 50 basis points on Thursday and the Bank of England set to revise UK interest next week on 23 March.
Credit Suisse had seen its shares repeatedly suspended after key investor, Saudi National Bank, warned it could no longer prop it up, but a support package from the Swiss government looked to calm things today.
RBC sees Credit Suisse’s issues as separate from the collapse of SVB and Signature Bank, but also highlighted the willingness of the UK and US governments to take "quick and decisive" action to stem any contagion.
The problems at Credit Suisse relate to profitability and the repeated brushes with controversy, Brewin said.
“It has a very robust liquidity and capital position,” the broker added, the “situation is radically different” to the events in the United States.