City File: News, good and bad

THERE is good news and bad news coming out of the banking sector. While Barclays shows signs of recovering by virtue of its bad debts to the property sector enjoying improving collateral, the knives are out for dear old TSB Group.

Mark Edey, of NatWest Securities, reckons that the prospects for TSB are the worst in the sector. It has a large exposure to low-margin mortgage business, and while operations such as Bank of Scotland are showing growth, TSB is still suffering a fall in underlying profits.

In addition, the ratio of TSB's share price to its profits before provisions stands at nearly five, compared with under four for NatWest, Barclays and Bank of Scotland. Time to switch.