The relative Price-Earnings Ratio (PER) of the Bank sector to the Industrials excluding the Banks, REITs and Utilities has been substantially de-rated over the past 18 months. After an average discount of close to 25% over the past ten years the sector currently sits at a discount of around 40%, but given the change in the operating environment for banks, is this enough? Given the trends in likely EPS growth, probably not yet.

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