Invesco Perpetual fund manager Mark Barnett believes UK banks still have a lot to do in order to catch up with their US counterparts.
Barnett, who manages the £264m Invesco Perpetual UK Strategic Income fund, sees the task of writing off peak loan assets as a huddle for UK and European banks.
Barnett says: “The UK, unfortunately, is behind the curve here; our banks are not through the worst and, therefore, the extent of economic growth in the UK economy is going to be more subdued.”
This view comes despite the argument that UK banks have shown signs of improvement with recovery, with Lloyds about to be fully privatised again.
James Griffin, manager of the £686m Fidelity Moneybuilder Growth fund, is overweight UK banks and bullish about their future. Griffin says: “For me, the banks are mis-priced. I have become increasingly more bullish on the UK market.
“Overall I think it is a market that looks the most attractive.”
As the US banks have set their sights on 2 per cent loan growth and economic growth, Barnett expects the “best we can hope” for the UK to be 1 per cent economic growth.