Big Short’s Eisman bets against 2 UK banks

Steve Eisman, the Neuberger Berman Group money manager who famously predicted the collapse of sub-prime mortgages before the 2008 financial crisis, is shorting two UK banks over expectations the country will leave the European Union without a trade deal.

The UK is one of the biggest risks Eisman is watching, he said at a conference in Dubai yesterday, declining to name the banks he’s betting against. The fund manager expects the UK government to agree its exit from the bloc, but said parliament is likely to reject the deal after that.

“I’m shorting two stocks in the UK, but I’ve got a screen of about 50, and I might short all 50 if I think Jeremy Corbyn is going to be prime minister,” Eisman said. ”

While Eisman didn’t give any clues as to which lenders he’s targeting, Metro Bank Plc and CYBG Plc are the most shorted financials in the FTSE 350 Index, according to data from Markit. Metro has 7.9 per cent of its outstanding shares shorted, double the ratio at CYBG.

Eisman’s bets against the housing market before the 2008 crisis were chronicled in Michael Lewis’s 2010 book The Big Short, which highlighted money managers who foresaw and profited from the market turmoil.