Four Top UK Banks Downgraded
Ratings company Panmure Gordon & Co., downgraded four top UK banks HBOS & Royal Bank of Scotland to "hold" from "buy."
Panmure also lowered Barclays & HSBC to "sell" from "hold."
In addition to holding asset-backed commercial paper, which may contain high-risk assets including subprime mortgages, the London-based bank's securities unit may be hurt by loans to hedge funds and private equity firms.
Panmure analyst Sandy Chen: Barclays may have "significant" risks from loans to hedge funds and private equity firms.
"We think there is a material risk that some of Barclays Capital's counterparties may be in trouble. What was previously a strong source of growth could turn into an area of weakness."
Panmure also lowered Barclays & HSBC to "sell" from "hold."
In addition to holding asset-backed commercial paper, which may contain high-risk assets including subprime mortgages, the London-based bank's securities unit may be hurt by loans to hedge funds and private equity firms.
Panmure analyst Sandy Chen: Barclays may have "significant" risks from loans to hedge funds and private equity firms.
"We think there is a material risk that some of Barclays Capital's counterparties may be in trouble. What was previously a strong source of growth could turn into an area of weakness."
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