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I think these FTSE 100 stocks could sink like a stone next year. Here’s why.
Barclays
Banks with significant US exposure have a good chance to grow profits, and especially if President-elect Donald Trump’s planned reforms jump-start the economy. Wide-scale deregulation could also benefit operators on the other side of the Atlantic.
But this isn’t enough to tempt me to buy Barclays (LSE:BARC) shares. The bank still sources the lion’s share of its profits — around 60% — from the UK. This creates large risks to investors, in my opinion, given the prospect of continued weak loan growth and higher-than-normal credit impairments.
Retail banks like this may also struggle if interest rates continue falling. This would put further downward pressure on Barclays’ net interest margins (NIMs), which are already under strain as competition from challenger banks and building…
