The large UK banks are likely to struggle to increase revenues, while the decline in impairment charges will take longer than first thought, according to analysts at JP Morgan, who argued that the sector may be overvalued despite encouraging year end results.

In a report titled Elephants in the Room, JP Morgan research analysts Jonathan Pierce and Robert Self suggested investors should exercise caution when investing in major UK banks Royal Bank of Scotland, Barclays and Lloyds Banking Group.