Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 2

While I agree that banks shouldn't be shunned, I think your point about examining management and how they treat shareholders is the big question when looking at European banks.

As Nathan pointed out, most (all?) will have to raise capital at some point in order to clean their books from this mess and the longer they wait the more painful for existing shareholders. I'd be happy to get in on a bank that is going to eventually return to strength, but I'd prefer to do it after the dilution is done (did you see the terms on UniCredit's capital raise - attrocious for existing shareholders).

I am interested in Lloyds because I think once they sell off their troubled assets and close down their investment banking their market position in the UK will make them similar to USB and WFC (although the CEO is a bit of a mystery right now - it isn't clear he has the physical strength to see the transformation through). Their shares have been rising lately as the fears of Europe have been subsiding, but there is still a ways to go before they cleanse themselves of the mess they are in and further dilution isn't out of the question.

I also like the banks like HSBC and Standard Chartered that don't have as much exposure to Europe and instead are focusing on growing markets in Asia and Africa. I also like, as in the case of Standard, management teams that raised capital when the getting was good and are now sitting on solid balance sheets as their European peers are retreating to take care of the home fires.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.