Bank shares led the FTSE 100 risers today as investors cheered a major relaxation of planned international banking liquidity rules and a four-year delay in their implementation.
British banks would be among the best-placed to boost their profits under the new rules because they are already well on the way to the new liquidity targets which will now come into effect in 2019 — four years later than first proposed.
Barclays led the risers, gaining 9.5p to 286.2p. It was closely followed by Lloyds Banking Group which was up 0.63p at 50.48p. Royal Bank of Scotland rose 2.2p to 335.95p, HSBC gained 4.9p to 672.45p and Standard Chartered leapt 4.5p to 1638p.
Analysts said UK banks would be able to release more of their capital than they had expected and use it to reduce expensive debt, thus boosting their earnings. Espirito Santo analysts suggested Barclays could save itself as much as £300 million a year in interest costs.
They also believe that new liquidity ratios — which alter how trade financing is scored — will be beneficial to Standard Chartered.
