UK Banks for sale

The valuation of UK banks at the moment is astounding. Here are the PE ratios and growth rates of the largest banks:

Bank 2007 PE Ratio Growth Rate (%) Yield (%)
HSBC 12 9 5
Barclays 10 10 5
RBS 9 9 5
Lloyds TSB 11 10 6
HBOS 9 10 4.5
Northern R 9 15 5

This data is from the III web site and should be taken with a pinch of salt. However it does display the value available at the moment. With most banks yielding as much as a savings account and growing EPS by 10% a year as well it is hard to imagine a portfolio of the above six banks giving a total shareholder return of much less than 15% annually over the next five years.

I already have a large investment in RBS, medium size investments in Lloyds and HBOS and a small investment in Barclays. So I am not really in a position to increase my exposure to banks. But I wish I was because at these valuations I could buy in and sleep very well at night.

If you have a loaded gun now is the time to fire at some of these bargains.