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SLI's Moore: owning big name income stalwarts is a risk
Markets
by Sarah Miloudi on Mar 21, 2013 at 14:46
In the summer of 2012, the lender was caught in the Libor manipulation scandal that swept across the banking sector, suffering a £290 million fine from regulators and the departure of three top executives.
Barclays’ shares crashed by double digits as it felt the full brunt of being the first to settle rate rigging. However since then, and with a new chief executive at its helm, the bank’s shares have more than doubled to 313p.
Moore, who holds just under 2% of his £105 million open-ended fund in Barclays, said: ‘In the summer of 2012, people were panicking about Barclays. Now the risk is not owning it.’
He pointed out that unlike state-backed rivals Lloyds and Royal Bank of Scotland (RBS), Barclays is less vulnerable to political whim and it has pledged to increase its dividend, setting a payout ratio target of 30% over time.
It also offers the potential for capital growth, given the might of its trading operations and new chief Antony Jenkins’ ambition to turn it into the ‘go to’ bank for retail clients.
Even though RBS’s chair said the bank is moving closer to paying out a dividend, Moore said he had no plans to buy in.
‘I look at Lloyds and RBS as political because the decision over when they start paying out a dividend depends on the government,’ he said.
‘I do not want to have to explain to clients in a year that the government decided not to make that happen,’ he explained, adding that in the case of Lloyds, its raft of asset sales had amplified its price-to-book, which suggests fragility later down the line.
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