It may seem strange to readers that we are tipping a UK bank this week and adding it to our short term trading portfolio, but we think this stock stands out for its quality in a sector which has been battered recently by negative news sentiment. This bank delivered some extremely good results for 2022, showing massive improvement in its core business profitability.
This bank is also a specialist in asset-backed lending to small business, which is something I know a bit about, having worked with a fund manager that runs a $1.5bn ABL book in the UK. In this case the bank in question is diversifying heavily into this market using a number of SME financing businesses. The asset-backed lending market is still very much a growth space for smaller and medium-sized players, as larger banks retreat from looking after the financing needs of the British small business (something they have been doing since the financial crisis in 2008).
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