Lloyds Banking Share Discussion Threads

[optomistic] 30/7/2020 12:27

Someone mention about there being no mention of PPI in the results...the 12.07 release contained this section:

"Payment protection insurance (excluding MBNA)

The Group has made provisions for PPI costs totalling GBP21,821 million; no additional charge has been made in the first half of 2020. Good progress has been made with the review of PPI information requests received and the conversion rate remains low and consistent with the provision assumption of around 10 per cent, albeit operations have been impacted by the coronavirus pandemic in the second quarter.

At 30 June 2020, a provision of GBP742 million remained unutilised relating to complaints and associated administration costs excluding amounts relating to MBNA. Total cash payments were GBP830 million during the six months to 30 June 2020.

The total amount provided for PPI represents the Group's best estimate of the likely future cost. A number of risks and uncertainties remain including processing the remaining outstanding complaints. These may also be impacted by any further regulatory changes. The cost could therefore differ from the Group's estimates and the assumptions underpinning them, and could result in a further provision being required.

For every 1 per cent increase in PIR conversion rate on the stock as at the industry deadline, the Group would expect an additional charge of approximately GBP100 million.

Payment protection insurance (MBNA)

As announced in December 2016, the Group's exposure continues to remain capped at GBP240 million under the terms of the MBNA sale and purchase agreement. No additional charge has been made by MBNA to its PPI provision in the first half of 2020."

[growthpotential] 30/7/2020 12:25

I agree, the CEO has got to go

[nemesis6] 30/7/2020 12:15

amazing...all those costs and the CEO still getting 5 mill a year...what planet ffs?

[mo123] 30/7/2020 12:15

One good piece of news is that Lloyds expect their interest margins to stay at around 240 bps for the rest of the year despite the low interest rate environment.
So hope for better things next year when all the short term bad news is out of the way.

[rasl5] 30/7/2020 12:08

​buywell3 : Thanks , you saved me £600 , because of your posts i add more lloy at 26p not at 29p . thanks

[bbalanjones] 30/7/2020 12:04

Apple: Jeez! in the seventies I was still using a tele-link to a mainframe based at UMIST - what a clatter those teletype machines made! Did not get into desktops till I bought a BBC "B" 32k ram in 1982 with twin floppies. Now still have legacy issues : although I kept updating/replacing I have never sold any on. Silly B - I still have 13 desktops plus two laptops, scattered about the house! Doh!

[sikhthetech] 30/7/2020 12:03

Mortgage payment hols & credit card hols will continue until Oct...

The banks were forced to allow payment hols.. They were also compelled into Covid loans with the govn claiming that taxpayers bailed them out a decade ago so now it's their turn...

I think these will fall further closer to 20p, as it's still early days...so I'll wait for now

[grahamite2] 30/7/2020 11:59

1carrus, the difficulty there is that all 3 costs - HBOS, the PPI fraud and the Covid loans - were engineered by the government. That makes it impossible to assess the relative impacts, as they are subject to government whim.

The PPI fraud was brought into being by the government to inject demand into a flat economy without wrecking public finances. It was brought to an end by the government too.

With Covid, who knows how far the government will go? They have clearly decided that banks are no longer businesses but social benefit operations.

The good thing is, we have been sub 28p before, we have had dividend freezes before, and Lloyds is still here. It'll get back to £1 some day, unless the government loses all restraint and actually kills the goose that lays the golden egg.

[gbh2] 30/7/2020 11:56

LLOYDS have been handing out loan holidays since the beginning of March so how on Earth were they ever likely to be in profit this quarter - rhetorical!

[hamhamham1] 30/7/2020 11:51

Essential. Lloyds owe the gov nothing, they wouldn't have needed a bailout of they hadn't been leaned on by the gov to buy HBOS. Lloyds was always the boring, safe bank.
And since then, they have paid the gov back, with interest, and paid tens of billions in PPI, a lot of which was free money for customers who did really know what the PPI was but pretended they didn't.
The gov forced banks to be more careful with their lending, and they became so. The buck stops with the gov on this bail out. Covid not caused by the banks, so they are not responsible for govs needed lending to people and businesses.

[supermarky] 30/7/2020 11:49

Chart says it all here and more drops likely imo

[supermarky] 30/7/2020 11:49

looking at long term charts 20p looks like a reasonable area to buy in. In no hurry to get in here with so much uncertainty and negative backdrop. Just my thoughts.

[gaffer73] 30/7/2020 11:47

PPI, divi payments, share buybacks and Coronavirus and still in business. Demonstrates how much money Lloyd's can make.

[dexdringle] 30/7/2020 11:37

AHO took a ridiculous stance on PPI. Under pressure from HMG he buckled and literally paid out everyone and anyone. Including people who'd claimed on it (meaning it was valid and not mis-sold) and people who'd never even had it.

HMG were trying to get money into the economy as much as anything else in a post Financial Crisis scenario - so a nice £19bn of money from Lloyds was a 'free' boost. AHO should have resisted, studied the claims more closely, and paid out half as much.

The marker cap of the whole bank is now less than the PPI claims paid out. It is madness.

[dope007] 30/7/2020 11:36

Minerva based on today's results BAE looks a solid buy at these levels. I was waiting for the results before doing anything but have now decided to start buying in tranches. Just bought the first one the last few minutes.

I am also watching here as LLOY has to be a decent recovery stock. The question is from what price? I think it's cheap now but would go cheaper in another mkt hit on coronavirus fears

[alphorn] 30/7/2020 11:32

Makes me smile when I read 'unspent provisions etc' so often.

There are many regulations about setting up provisions.

Just how much of the PPI provisions were released??? They actually needed topping up on several occasions!!!

Reality please; it is often helpful.

[stupmy] 30/7/2020 11:22

EI, there's a film that's really interesting for that side of the story. I would really recommend that people watch 'Too Big to Fail'. Entertainment value is high, but so is the learning value

[minerve 2] 30/7/2020 11:14

1carus

Agreed, although good investing doesn't require you to be that smart, it just requires certain character attributes and hard-work. A little bit of luck goes along way too. :)

Best to ride it out.

I have a significant holding in tobacco. It is the only sector that delivers excellent yields and also has a significant world-wide web of distribution and manufacture that could continue relatively uninterrupted whilst COVID and its wake ripples through economies. I'm using the dividends as tranches into recovery stocks as and when recovery becomes more certain over the next year or so. I haven't quite made my mind up which sectors yet. Just watching.

[essentialinvestor] 30/7/2020 11:13

ham, when delinquencies soar you donr think political pressure
will mount on banks to take some of the pain?, eventhough banks
were told to light touch lend quickly.

[hamhamham1] 30/7/2020 11:11

Any unspent billions in the bad debt provisioning will be returned to shareholders as divis or used for share buybacks.

[hamhamham1] 30/7/2020 11:09

The gov have underwritten most all the banks covid loans, the banks due diligence was stopping them lending until gov backstopped the lot

[stupmy] 30/7/2020 11:06

I'm hoping there will be much more coverage of the banking sector now. It feels likely that the speculation on the sector is going to be pretty negative for a while. Maybe clarity on the arrival or not of a second wave of viral infections will underscore the share price Who underwrites the loans for the travel industry? By that I'm thinking about arilines/cruise ships? I suspect we've not seen the end of the bad news for those sectors.

[1carus] 30/7/2020 11:01

Only time will tell Min as always. In the scale of things, I cant see Covid costing LLoyds the same as the Halifax takeover and the PPI payments scandal. But we shall see. Difficult times for many people. For those not as smart as you and who have years on their side the markets will come back, but this market is haveing a difficult effect on pensions for 'normal' people who have done the 'right'thing over the years and paid in to schemes of one form or another. Hard times ahead for some I think.

[mitchy] 30/7/2020 10:53

I can't see much upside to these considering the third quarter results will be the same or worse. There are more job loses and business failures to come for sure
and there will be more bad loans written off. The housing market is buoyant yes and online retail is doing ok as is pharmaceuticals but the oil companies are losing huge profits, the car manufacturers struggling etc. I'm not sure about builders. Gold miners are doing great and the power companies are starting to feel the benefit of electric cars coming on stream. Check out cheap Chinese electric cars on Alibaba at very affordable prices for the average person.

[minerve 2] 30/7/2020 10:51

The truth is you just cannot accurately predict future behaviour - government, society and virus - of a pandemic that has never happened before in our time. Stick your finger in the air.