HBOS, the UK's biggest mortgage lender, may post an 18 per cent decline in earnings in 2009 if house prices drop 10 per cent a year, analysts said today.
Barclays, Lloyds TSB Group and Royal Bank of Scotland Group would also face "single digit" percentage declines in their results under those conditions, analysts led by Peter Toeman at London-based HSBC wrote in a research report.
HBOS's "target price" was cut to 300 pence from 400 pence by HSBC, which has a "neutral" rating on the stock. Barclays was reduced to 290 pence from 360 pence, while RBS was cut to 260 pence from 290 pence.
The Lloyds "target price" was lowered to 400 pence from 350 pence. HBOS rose as much as 6 per cent, and traded up 4.8 per cent at 331 pence as of 8.24am in London.
Bloomberg