Deutsche Bank has cut Royal Bank of Scotland (LON:RBS) to 'sell' from 'hold' and Lloyds Banking Group (LON:LLOY) to 'hold' from 'buy' in its note on UK banks, today.
Regarding RBS, Deutsche said: "We think RBS is most at risk in near/medium term due already low deposit rates (36bps), likely downgrades to loan growth, additional restructuring charges & likely lack of dividend until 2018."
Meanwhile, in respect of LLOY it commented: "Lloyds should benefit in near term from falling deposit costs and potential sub-debt redemptions. However, we see risks from remortgage churn in medium/longer term."
Target prices for RBS and Lloyds have been cut to 170 pence (from 200 pence) and 59 pence (from 60 pence), respectively.
(LON:LLOY) Lloyds Banking Group PLC ORD share price was -1.26p at 59.69p
(LON:RBS) Royal Bank of Scotland Group The PLC share price was -6.95p at 197.35p