Liontrust's Luthman: UK banks at risk of further rights issues

The state of banks' financial health remains "obscure" and means they should be avoided by investors for now, Liontrust's Jan Luthman has said.

Luthman, co-manager of the Liontrust Macro Equity Income fund, said the group views banks as being driven by political and regulatory imperatives, rather than free market forces, with the true state of their financial health hidden. As such, he and co-manager Stephen Bailey have no exposure to banks in the Macro Equity Income fund. Luthman said: "The Bank of England's governor, Sir Mervyn King, has said that banks should ‘drop the pretence that their debts will be repaid' and that they lack sufficient capital to absorb undeclared losses, which implies an eventual requirement to raise ...