Banking stocks: A leap of faith?

Angus Rigby, Chief Executive Officer, TD Waterhouse comments: “The 1 in 5 (21%) of TD Waterhouse customers who took a leap of faith with Royal Bank of Scotland (RBS) this week would have been pleased to see the bank shrug off fears of further asset write-downs and capital concerns from its acquisition of ABN Amro in its full-year results today. RBS’ operating profit lifted 9% to £10.3 billion for 2007 with strong growth from its retail and corporate banking operations in Britain.

“Consequently, trading has been strong in the stock and our investors have been lured once more into the banking sector with hopes of juicy yields. Indeed, banking stocks in general accounted for 72% of all our retail investor buys and 68% of our sells over the week.

“TD Waterhouse customers who increased their exposure to mortgage lender Alliance & Leicester after it reported a 30% drop in profits will have enjoyed its rally this week, with shares now trading up almost 20% on last week. Similarly, those who looked to profit from rival Bradford & Bingley’s turbulent times have seen shares lift by 7 % this week on last.

“Casting an eye to more exotic climes, FTSE 250 South African miner Aquarius Platinum was also popular amongst our customers this week. Share price in the Company has been performing strongly, hitting an annual high of 876p per share in recent weeks despite suffering power problems in the region. Half year earnings were also reported to be up by 25% to $106.6 million thanks to rising metal prices and ever increasing investment interest in platinum group metals (PGMs).”