Cable: Bank return expectations unrealistic

13 December 2012

Investors need to rein in their expectations in when it comes to the returns they will garner from British banks.

That is the opinion of UK business secretary Vince Cable, who has accused shareholders of having "hopelessly unrealistic" expectations of financiers in the aftermath of the global economic downturn, the Daily Telegraph reports.

During a speech delivered at the Association of British Insurers annual conference, Mr Cable insisted British lenders are not "uninvestable", but called on professionals to reappraise their opinion on "what banks are and what they do".

The minister explained that a culture of over-expectation among investors has been developed due to "bank bosses like Bob Diamond", as officials such as the former Barclays chief executive promised unobtainable returns.

Mr Cable went on to note that while government-enforced regulatory reforms have been designed to make banks safer, they may have caused a "conflict" over what investors expect and the reality of the sector in the post-recession landscape.

By Claire Archer

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