Reduced circumstances

Everyone knows that banking has become the most competitive of businesses, but Dresdner Kleinwort Benson were hammering the point home yesterday, warning their clients not to treat the sector as a "safe haven".

Analysts at the investment bank see margins eroding fast, while cost pressures are rising. "Mortgage and consumer credit volume growth is falling and re-mortgaging is rising, competition from new entrants and mutuals remains intense, and costs are rising with a step increase in IT costs chasing an uncertain reward," a note said.

So DKB has downgraded Halifax from a "buy" to a simple "add" (knocking 5p off the price to 585p). Analysts are sticking to their "reduce" view on Lloyds TSB, which nevertheless managed a 3.5p advance to 678.5p.

Poor Alliance & Leicester, meanwhile, is now rated a "sell." The shares fell 2.5p to 639.5p.