Zacks Industry Outlook Highlights: Royal Bank of Scotland, Lloyds TSB Group, Barclays, Banco Santander and Banco Bilbao Vizcaya Argentaria

Zacks.com announces the latest Industry Outlook. Today’s outlook from Zacks Equity Research analyst Ann Heffron discusses the Non-US Banks sector. Highlighted stocks include: The Royal Bank of Scotland Bank plc (NYSE: RBS), Lloyds TSB Group plc (NYSE: LYG), Barclays PLC (NYSE: BCS), Banco Santander Central Hispano, S.A. (NYSE: STD) and Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBV).

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Here is the latest on the Non-US Banks sector:

At this time, we see no near-term opportunities in this space.

Stocks that could prove especially problematical include banks who participate in government recapitalization programs, such as The Royal Bank of Scotland Bank plc (NYSE: RBS) or Lloyds TSB Group plc (NYSE: LYG). In return for the government capital, these banks must submit to other government intervention, including limits on dividend payouts and nomination of board members. This will limit their financial flexibility for a while, which could hurt stock performance.

In addition, other banks have been forced to strengthen capital through rights offerings or other forms of capital increase, such as Barclays PLC (NYSE: BCS) and Banco Santander Central Hispano, S.A. (NYSE: STD), significantly diluting existing shareholder interests, also a negative for share prices.

Current Sells include Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBV), and Banco Santander Central Hispano.

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