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Piling on the pain for British bank shareholders

Ben Chu

A Trader on the floor of 007 150x150 Piling on the pain for British bank shareholdersIt’s another grim day for the share prices of UK banks on the stock market. And over the past week the share prices of Lloyds, the Royal Bank of Scotland and Barlcays are down between 15 and 20 per cent.

It’s around six months since those three banks issued their annual reports for 2010 which were full of optimism about 2011.

Well, if an investor had believed them and brought shares at that point he or she would now be sitting on large losses.

Here’s what’s happened to Total Shareholder Return (which measures share performance plus dividends paid) at those banks, contrasted with the performance of the FTSE 100 as a whole:

lloy 6M ALL SHARE T T F 193 Piling on the pain for British bank shareholders

So if you’d invested £100 in the FTSE  you’d be looking at a £90 return.  But £100 in RBS shares would have given you £70. £100 in Barclays shares would have left you £65. £100 in Lloyds would have rewarded you with £55. Even £100 in HSBC shares would have returned just £85.

And what if you’d bought shares in these banks five years ago and stuck with them through the 2008 turmoil? Would you have been rewarded for your faith and patience? Nope.

Here’s the total shareholder return of those banks since 2006:

lloy 5Y ALL SHARE T T F 255 Piling on the pain for British bank shareholders

If you’d bought Lloyds and RBS shares then, you’d be 80 per cent down. Your Barclays shares would be down by more than 50 per cent. HSBC would be down by a fifth. The general stock market, on the other hand would be almost even.

One wonders just how badly these banks have to perform before shareholders start asking why they are paying out billions of pounds of revenues in bonuses to their executives and employees each year.

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  • manofthepeepl

    O for shareholders with the bottle to challenge boards instead of just selling when the going gets tough.

  • Rollo10

    I don’t for the life of me understand these ’shareholders’, looking at those figures above since ‘07, Why have they not challenged the banks over the bonus? I would certainly be embarassed to call myself a shareholder, if I was. It would indicate I was thick and knew nothing of figures, I would most certainly be looking at MY wedge compared to theirs, and thinking of pulling the plug. They would make a damn sight more in the utilities.

  • psimin

    the shareholders deserve all they get and im pleased to see these idiots suffer, they have continuously remained silent and watch as the banks they had shares in gave away millions of pounds in bonuses to their executives etc. good now suffer for your stupidity,


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