SOURCE: Paragon Financial Limited

Paragon Financial Limited

November 14, 2011 08:16 ET

Lloyds Bank Benefits From Minimal Italian Exposure -- Barclays Weighed Down

The Paragon Report Provides Equity Research on Lloyds Banking Group & Barclays PLC

NEW YORK, NY--(Marketwire - Nov 14, 2011) - British banking stocks have taken a hit this month as investors worry about the financial firms' exposure to Italy, Greece, and Portugal. In recent quarters banks in the UK have made efforts to cut their exposure to the Eurozone, but the latest figures published by the UK's four biggest banks show they hold a total of £42bn of Italian debt. On the upside, UK Banks are looking strong domestically, with the top four financial firms posting improved loan growth. The Paragon Report examines investing opportunities in the Foreign Banking Industry and provides equity research on Lloyds Banking Group PLC (NYSE: LYG) (LSE: LLOY) and Barclays PLC (NYSE: BCS) (LSE: BARC). Access to the full company reports can be found at:

Reporting banks based in the UK have cut their exposure to Italy by 46 percent since the end of the second quarter. The firms also cut their exposure to Spain by 38 percent, to Greece by 31 percent and to Portugal by 22 percent. According to The Telegraph Barclays has by far the largest overall holding at £25.7 billion, of which just over £4 billion is in the form of a direct exposure to the Italian government.

Lloyds Banking Group, meanwhile, has the smallest exposure of Britain's big four major banks, with £2.7 billion of Italian holdings, just £52 million of which is in the form of government bonds.

The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on the Foreign Banking industry register with us free at and get exclusive access to our numerous stock reports and industry newsletters.

In the UK Regulators and Banks -- and the Government -- are at a crossroads. According to Britain's Financial Watchdog, regulators are having a difficult time stopping banks from calling in loans to comply with tougher capital standards. The European Banking Authority (EBA) wants banks to meet the new rules by curbing bonuses and dividends and avoiding deleveraging or scaling back loans.

UK Financial Services Authority Chairman Adair Turner said if banks are deleveraging, he would prefer to see it done in interbank trading rather than lending operations. Meanwhile, the UK Government's "Project Merlin" has sought to put pressure on banks to keep lending to businesses. According to The Guardian Britain's banks say they are on track to meet lending targets set by the government under Project Merlin. The figures have been disputed by small business leaders, however, who argue loans are becoming tougher to find, and more costly.

The Paragon Report has not been compensated by any of the above-mentioned publicly traded companies. Paragon Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at