Renowned financials investor Philip Gibbs has increased his holdings in banks to their highest level in almost two years, reversing a bearish approach that brought in money despite the financial crisis. The news coincides with research that suggests Morgan Stanley and Goldman Sachs are so well capitalised they could start share buybacks worth $20bn (€13.6bn).

Gibbs' £1.3bn (€1.4bn) financials fund at Jupiter Asset Management was the only financials portfolio to make money for UK investors last year, thanks to an extremely bearish asset allocation adopted in late 2007. He maintained the stance into this year: at the end of January, his fund held 1% in banks.