Ashley Pittard: Why investors shouldn’t desert quality banks
Turmoil among global banks over the past six weeks has created opportunities for investors, with Swiss-based UBS and Wall Street giants JP Morgan and Wells Fargo the top picks, says our head of global equities Ashley Pittard.
“You want to invest in a bank that’s one or two in its market, and has high-quality management,” Ash says.
“Bank stocks can go down in a crisis environment, but the quality banks don’t go broke – that’s a key point.”
Banks should do well in coming quarters as they reprice credit and achieve higher margins, he argues.
“If we fast-forward through the year, there’s no doubt there’s going to be a recession in the US.
“The yield curve will steepen and that’s good for banks because they borrow short and lend long and they should get a wider spread.
“That should feed back in a couple of years into higher earnings.”
