UK banks’ share prices plunge

Several major UK banks have seen their share prices dip this morning, on the back of the crisis that engulfed Bear Stearns.

Shares in HBOS dropped just under 10% this morning, from 528p to 478p, while Barclays’ share price fell 6.47%, from 433p to 405p, and Lloyds TSB saw its stock drop 3.86% from 421p to 405p.

Shares in Royal Bank of Scotland fell 7.79% from 333p to 307p. HSBC saw only a minimal decline of 1.18%, from 762p to 749p.

John Goodall, private client research analyst at WH Ireland, says a sheep mentality prevailed this morning.

He adds: “There’s a lot of panic out there and quite a lot of it is undue.

“It seems people are moving beyond the fundamentals and just panicking. I can see it will be like this for the next couple of days – there has been a flight to the defensive.”

Goodall adds: “If you look at HSBC, for example, its Tier One capital ratio indicates how strong its balance sheet is and many other banks have recently raised their dividend payment – these are the kind of fundamentals investors need to consider – but everyone is falling over themselves to get out.”