Additionally, Barclays plc has been downgraded from "buy" to "neutral".
UK banks Royal Bank of Scotland Group plc (LON:RBS) and Lloyds Banking Group plc (LON:LLOY) have today been downgraded by Nomura Holdings Inc (NYSE:NMR) from "neutral" to "reduce". RBS's price target is cut from 34p to 26p, while Lloyds is cut from 40p to 35p.
The broker said that the recent strong recovery in the sector should be seen as a selling opportunity:
"Both groups are banking sector restructuring stories and therefore geared to market risk appetite, and we regard the current sector rally as a selling opportunity in what are likely to be drawn-out recovery projects in both cases."
Nomura believes that the two firms are likely to see downgrades to results in both their core operations and in the costs of exiting the non-core.
The broker also downgraded its rating for Barclays plc from buy to neutral but left the target price at 268p.