Stocks higher despite China data; Barclays down 7% – CNBC

11 months ago Comments Off on Stocks higher despite China data; Barclays down 7% – CNBC

On the earnings front, British bank Barclays reported an a 8 percent fall in statutory pre-tax profit in 2015 to £2.1 billion ($2.9 billion) and announced it is looking to sell down its 62.3 percent holding in its African business. Shares in the British lender were down over 9 percent.

The overall banking sector was under pressure as a result. Concerns about the bad loan portfolio of some banks has caused a sell-off in the sector in the past couple of months, with analysts saying the low interest rate environment is hitting lenders globally.

“I think that the biggest risk to banks is not even a localized one…it’s a global and it has got to do with deflationary pressures, secular stagnation I very much buy into those theories,” Francesco Filia, chief executive of Fasanara Capital, told CNBC in a TV interview on Tuesday.

“The consequence of that is deeply negative interest rates for a prolonged period of time and if that is the answer of policymakers to deflationary trends, that is going to be very difficult for banks because no bank has ever been designed to survive in a deeply negative interest rate environment for a prolonged period of time.”

Stocks higher despite China data; Barclays down 7% – CNBC