Brokers divided over bank prospects after turbulent year

The LIBOR-rigging scandal that engulfed the banks in 2012 further dented their badly tarnished reputation and dealt another blow to public confidence, leaving investors uncertain how to play the sector.

In November, the Bank of England also revealed four of the biggest UK lenders – RBS, Lloyds, Barclays and HSBC – may face a capital hole of up to £35bn which is needed to meet regulatory demands, hidden losses and potential mis-selling costs. But there was also positive news for the sector last year. Lloyds was the best performing stock in the FTSE 100, rising 85%, while RBS added 61%. So how should investors be approaching the sector in 2013? UBS, Bernstein Research and JPM Cazenove recently outlined their views on the banks based on their capital position, restructuring plans and pote...