Deutsche ups targets for Barclays and other UK banks

UK banks will struggle to make efficiency gains in 2021 because of the cost of collecting a surge in non-performing loans and Covid bounceback loan expenses, Deutsche analyst Robert Noble said. He said this environment would have varying effects on banks' results.

"Barclays, Standard Chartered and Virgin Money are more prescriptive and conservative on guidance and need little by way of efficiency gains to avoid forecast downgrades - whereas we see consensus expectations for HSBC, NatWest and Lloyds as more difficult to achieve," Noble said in a note to investors.

Noble recommended buying Barclays shares and upgraded his price target to 165p from 135p. He also kept his 'buy' rating on Virgin Money and upped his price target to 150p from 105p. Noble closed his 'sell' catalyst call on Standard Chartered and increased his share-price target to 480p from 415p with a 'hold' rating.

He kept a 'hold' rating on Lloyds Banking Group and increased his price target to 35p a share from 32p. Noble rated NatWest and HSBC as 'sell' stocks while increasing NatWest's share price target to 130p from 100p and HSBC's to 350p from 305p.