European banks

[Spekulatius]

The stress test from the ECB was already concluded a few weeks ago and want too flatering for the British banks as a whole:

http://tools.eba.europa.eu/interactive-tools/2018/powerbi/ST18_visualisation_page.html

 

I like the British bank from a profitability point of view, but I don’t like the economic setup (Brexit) and possible political changes (bank unfriendly Labour government replacing the current coalition). Then there is also the money laundry issue with the EU following the US to set serious pot. Multi billion € fines instead of a slap on the wrist like it used to be in the past.

 

I bought some GS close to tangible book and feel much safer.

[rb]

How do u feel about british household debt?

[John Hjorth]

... I bought some GS close to tangible book and feel much safer.

 

Spekulatius,

 

A bit off topic here, but anyway : I was actually a bit surprised when you posted about this buy of yours in the "What are you buying today?" topic - I have from your posts in general for a long time considered you a wholeheartedly investment bank skeptic / hater. [ : - ) ] [To me, naturally OK that you post something like this here, thereby elaborating your line of thinking about risks related to the UK banks and related investment alternatives.]

[meiroy]

 

 

I bought some GS close to tangible book and feel much safer.

 

Yepp.  Non brainer.

 

[Spekulatius]

... I bought some GS close to tangible book and feel much safer.

 

Spekulatius,

 

A bit off topic here, but anyway : I was actually a bit surprised when you posted about this buy of yours in the "What are you buying today?" topic - I have from your posts in general for a long time considered you a wholeheartedly investment bank skeptic / hater. [ : - ) ] [To me, naturally OK that you post something like this here, thereby elaborating your line of thinking about risks related to the UK banks and related investment alternatives.]

 

There is a price for everything. I don’t like investment banking, but at least when I buy GS, I own the best investment banking operation there is, rather than chimps like JEF. Also, the banks like BAC and JPM have still significant investment banking operations, yet trade at rich multiples to tangible book, while GS trades close to tangible book.

 

GS has build up wealth management and commercial banking and I think they are slowly moving into consumer banking too. Even if GS investment banking ops are only worth tangible book (even if they are best in class), the remainder is worth a far higher multiple, which means that GS as a whole is undervalued, except in the most dire economic conditions.

[John Hjorth]

Danske Bank just got kicked out of Estonia. [0_0]