Piling on the pain for British bank shareholders
It’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:
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:
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.Tagged in: barclays, HSBC, lloyds, rbs, total shareholder return
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