Fund managers snap up cheap banking stocks

Leading fund managers are moving to snap up ‘cheap' UK banks after a dismal year which saw them drop in value as markets raced higher.

Bank shares have posted losses of as much as 13% in the past year, while the FTSE All Share has risen 16%. Investors have avoided the sector amid ongoing uncertainty over its future, but Chancellor George Osborne provided some clarity last week as he gave support to the recommendations of the Independent Commission on Banking (ICB) in his annual Mansion House speech. The ICB’s plans include the ring-fencing of retail banking operations from investment arms to protect savers, as well as forcing institutions to retain 10% of capital on balance sheets as a buffer against a future financi...