De Blonay slashes bank holdings

Jupiter financial opportunities fund manager Guy De Blonay has cut his exposure to banks from 50 to 30 per cent over the last month.

He has ditched his holdings in HSBC and Barclays.

De Blonay, who had a 7.24 per cent holding in HSBC and 3.36 per cent in Barclays in February, has come out of the two banks completely over the last three months.

De Blonay says: “We saw better opportunities elsewhere in non-bank financials, like asset managers, private equity groups, insurance, credit cards and real estate. One risk for banks in developed markets is sovereign risk, plus banking regulation is still uncertain.”

But Schroders head of UK equities Richard Buxton, who holds a 10 per cent exposure to banks, says: “The profitability of banks’ core activities is still there and they will be able to move back towards making a 15 per cent return on equity. I have been adding to Lloyds and RBS and maintaining my position in Barclays.”

Fidelity fund manager Sanjeev Shah, who runs the company’s £3bn special situations fund, has also increased his exposure to banks.

In January, banks made up 16 per cent of the portfolio, which Shah increased to 17.8 per cent at the end of April.