Mundy offloads Lloyds on 'zombie bank' fears

Investec's Alastair Mundy has sold out of Lloyds in his £1.57bn Cautious Managed and £344m UK Special Situations funds on fears the group runs the risk of becoming a ‘zombie bank'.

Mundy, who has held the group at various stages over a number of years, has highlighted a number of potential problems for the retail bank, including a high loan-deposit ratio. "Over the last few years, Lloyds Banking Group in its various guises has been rather like an old girlfriend we cannot resist revisiting," Mundy says. "The allure is the great retail banking franchise which, despite some enforced sell-offs, remains a highly profitable prize. "This ‘promised land' is offered to shareholders with a few caveats: a loan-deposit ratio that needs to be reduced, a wholesale funding ...