Banking sectors in US and UK sending mixed messages at end of quarter

Ever since the recent downturn began in 2007, the banking sector, one of those worst affected, has struggled to see its fortunes return to normal following a collapse in profit levels. Anxiety still pervades despite the downturn officially ending earlier this year in both the US and UK, especially for some of the biggest banks.

With the current financial quarter drawing to a close, financial results from banks and building societies on both side of the Atlantic are due anytime soon, and in anticipation of them, some shareholders are selling while they can. Friday’s results in the US revealed that both JP Morgan Chase and Wells Fargo have seen their share prices fall, and a similar pattern in the UK has emerged.

Traditional banks faring worst

On the FTSE 100, Friday saw shares in Barclay fall by 0.85% in value. In light of everything to affect them including the Libor scandal, their former CEO said that the UK banking sector as a whole was in a stronger position than it was prior to 2007. While Barclays and The RBS group were among the big losers in the markets, some building societies have been on much firmer ground.

For the past couple of months or so, the share price of has remained exactly the same. While this might not be interpreted as good news by some, its steadiness could be seen as handy for anyone who may have a stocks and shares ISA who doesn’t want to see the value of the money they have saved fall.

The key to success

One of the reasons behind their comparatively good performance on the markets may be down to mortgages. It was recently revealed that YBS have the lowest mortgage rates currently on offer, providing something of a boon to both struggling property firms and first-time buyers desperate to finally get on the ladder.

Mortgages could be instrumental in determining future performance for many banks. The acceleration of the government’s flagship Help to Buy scheme may see take-up of mortgage products increase, which may in turn see banks and building societies put behind the bad times once and for all.