View more on these topics

Bond pressure is putting bank business under threat

M&G corporate bond fund manager Richard Woolnough believes the business model of banks is under threat.

Woolnough, who has been bearish on banks, says he will remain underweight on financials and warns that more writedowns are on the way. He says: “Banks rely on borrowing at one rate, lending at a higher rate and making a profit. But if corporates can borrow more cheaply by issuing bonds to the market, then why should they go to the banks to borrow money?”

Woolnough say banks can only make money at present by lending to higher-risk borrowers, a sector they want to avoid.

He says: “Banks are desperate to borrow from the market, and a whole stream of banks have been trying to issue bonds whenever there is a short-term rally in risky assets. Continuing heavy issuance will put further pressure on bank bonds. There is a point when they become attractive. Once the majority of this emergency issuance is done, we think there could be some excellent opportunities towards the end of the year.”


Product matters

Advising clients on when to buy into funds based on investment themes is a perennial problem for advisers – too early and you risk waiting years for a pick-up, too late and you have missed the boat.In its agriculture fund, one of the few retail funds looking solely at soft commodities, Eclectica believes it is […]

Budget’s hidden agenda

Well, for those of you who thought Gordon Brown’s last Budget delivery was boring, the latest Chancellor took us to subterranean levels.

Board changes at Home of Choice

Home of Choice chief executive officer Richard Coulson is to become the network’s executive deputy chairman following a series of board changes announced today. Managing director Gerry O’Brien will take over as chief executive. Chairman Keith Baldwin says Coulson will remain operationally involved in the business taking responsibility for strategy, policy and acquisitions, saying he […]


School fees planning

Jeremy Pearson is Technical Support Manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. Many parents value the standard of education offered by […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm