Lloyds Banking Group may have returned to profit earlier than expected but Barclays is the preferred bank for buying, says The Share Centre.
Yesterday’s announcement that Lloyds Banking Group, which is 41 per cent owned by the tax payer, had seen a four per cent rise in its share price for the first quarter of 2010 surprised investors. But The Share Centre says the figures should be viewed cautiously and that Barclays is still their investment bank of choice.
Nick Raynor, investment adviser at The Share Centre, said: “Although the bank's share price rose in anticipation of this morning's results, the absence of quantifiable figures caused it to fall back from these early highs to 70.90p.
“We continue to list Lloyds as a ‘hold', but those who feel brave may wish to consider the bank as a long-term play. However, Barclays remains our bank of choice for investors looking for growth and income within the sector.
“Last week we upgraded Barclays from a ‘hold' to a ‘buy'. We admire the bank's strength in its refusal to be bailed out by the government, instead opting to take matters into its own hands. Barclays even managed to take advantage of the industry crisis by acquiring assets at a lower cost.
"Investors looking for income will be attracted by Barclays' ability to reward its shareholders; something part taxpayer owned banks are unable to do.”
Mr Raynor also commented that Barclays is in a stronger position because of its international exposure and warned that state owned banks like Lloyds and RBS will be more susceptible to the economic effects of a hung parliament.
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