Alliance & Leicester

A bank! A UK Bank!

The market cap. is £1.8 Billion, the PE is 7 and the dividend yield is 13%!

I have had more than enough of UK banks in the last 12 months. That probably means that now is a good time to start buying, and in fact I am, but not into AL.

AL has been hit harder than most UK banks with its share price now just over one third its peak price a year ago. This is because AL is relatively small and derives a lower proportion of its funds from savers than other banks. Also it is fundamentally a mortgage bank which means it is receiving a double whammy from the credit crunch and the housing market slowdown.

It has had to make some nasty write downs recently but excluding the "one-time" write downs trading is in line with last year.

This probably makes AL a good choice for the risk-loving investor. I would certainly rather buy AL than some pre-sales biotech that might never make money.

However I already have holdings in Barclays, RBS, HBOS and Lloyds TSB (which explains a lot about my portfolios' performances last year!) I do not need another UK bank.

Bye Bye AL.