Bank stocks outperform on Brexit day

Finally, some light relief for European banks.

UK and European financial stocks are rallying strongly today, after the latest polls showed further momentum towards a Remain vote in Britain’s EU referendum.

At pixel time, Barclays is up 2.4 per cent, RBS has gained 2.7 per cent and Lloyds has risen by 1.3 per cent, reports Thomas Hale, capital markets correspondent.

All have outperformed the benchmark FTSE 100, which is up 1.2 per cent hitting a 2-month high on Thursday. Polls in the UK close at 10pm (BST).

Bank stocks, which are seen as particularly exposed to a potential post-Brexit recession, had fallen sharply this month but are rallying nicely this week as polls indicated the UK’s pro-EU camp has narrowed the gap on its rivals.

The Euro Stoxx banks index is up 3.2 per cent today, its fourth consecutive day of gains.

The last polls carried out before the referendum results are announced tomorrow morning both show ‘Remain’ pulling ahead. The surveys from Populus and Ipsos Mori were carried out before voting began this morning, and give the pro-EU camp a 10-point and 4-point lead respectively.

While volatility has increased in the lead-up the referendum, the banking industry still faces a host of tricky long-term challenges ranging from complex new regulation to low or negative interest rates.