Credit Suisse reiterates 'positive' stance on UK Banks

To back up their arguments, they pointed to the improving economic and rate outlook and "cheap" valuations relative to history.

Linked to the former, their estimates for earnings in 2022-23 were ahead of consensus based on their view of the current yield curve for margins and recovered returns.

For the first quarter specifically, the "stand-out" area of performance was expected to be Capital Markets, with financial markets likely to see through weak revenues on the consumer side, such as from credit cards.

Credit Suisse also saw scope for "surprises" when it came to asset quality.

Furthermore, thus far in the year, the UK had seen the highest gross domestic product and unemployment upgrades.

Against that backdrop, their stated preference was for shares of UK domestic lenders over UK internationals - with their 'top pick' being Lloyds.

Lloyds was not exposed to Capital Markets but it stood to gain the most from the improved outlook.

The Swiss broker meanwhile was at 'neutral' for HSBC and 'underperform' on StanChart.

"Among the most meaningful risks to our calls are the path of the coronavirus and restrictions in the UK, and Scottish politics and a potential push for a second referendum, which we wrote about in our note Scottish elections and bank concentrations."