Lloyds Banking Share Discussion Threads

[mikemichael2] 06/3/2020 08:26

'30 times more deadly than flu'

Think you are wrong there, everyone i know who has had proper flu, and not just a cold, are usually bed bound for a few days and weak as hell. We are told CV in most cases is mild, and in many you won't even know you have had it !!!

However, doubled up on the bog rolls.Not because of the virus, but the Lloyds Share price.

[essentialinvestor] 06/3/2020 08:23

That's the reported death rate, likely very different from the death rate.
However even at 1% it would be 10x more virulent than seasonal flu.

[spandy83] 06/3/2020 08:21

That's exactly why there is panic. This Coronavirus is 30 times more deadly than Flu. Death rate of 3% vs 0.1%. If it became as widespread as flu there'd be substantial annual deaths from it; and it'll likely mutate (possibly get worse, possibly better like swine flu eventually did). It may seem like sensationalism but these people do know what they're talking about.

[ignoble] 06/3/2020 08:18

Well put Gaffer...

The worst virus is every tw*t and his brother flooding Social Media with their opinion that everyone believes.
Imho

[pal44] 06/3/2020 08:16

put it in context about 2000 people die on uk roads thats about 40 a week or 8 per day now why dont we report on this ..

[smartypants] 06/3/2020 08:16

So far....
The United Kingdom spent at least £4.4 billion on preparations for the country's withdrawal from the European Union, the National Audit Office said in a report published on Friday.

Most money was spent on staffing, infrastructure building and external consulting according to the independent watchdog responsible for auditing the government.
The amount of money makes up approximately 70% of the total amount allocated for the planning purposes.

[mikemichael2] 06/3/2020 08:04

Flu has a 'peak', we are a fair way off the peak.

[gaffer73] 06/3/2020 07:55

87000 death's from flu and no one bat's an eye. 3500 from coronavirus and the world is in a blind panic.

[ekuuleus] 06/3/2020 07:52

yes pugugly, especially the corporate loans and corporate culture issues.

[xxxxxy] 06/3/2020 07:51

No British fish for the French.No Deal

[xxxxxy] 06/3/2020 07:50

Why I am not worried about UK state debt levelsBy JOHNREDWOOD | Published: MARCH 6, 2020The UK government bas put in a new control on UK state debt. It is a sensible one. The interest on the debt should not be more than 6% of total public spending. This appears to be quite a tough target, as very year bar one from 1945 to 2000 saw interest higher than 6% of spending.Today debt interest is around 4% of public spending, or under 2% of GDP. It is down at this level mainly because UK interest rates are so low and look likely to stay low. UK rates remain higher than the Euro area and Japan though below the US.State debt at the end of last financial year was £1.82bn or a quite high 85% of National Income. This was a gross figure. The Bank of England, 100% owned by the state on behalf of taxpayers, owned £435 bn of that. If you deduct that, state debt was a more realistic £1.39tn or 67% of GDP, a low figure by contemporary standards.Refinancing UK state net debt today at rates under 1% for up to 30 year borrowing would leave the state with an net interest bill to pay of under £13.9bn or under 2% of state spending. There is every reason to get on with funding the debt longer and refinancing . It is clearly affordable. It is, however, as some will rightly point out, no reason to waste money. Tax cuts are a particularly good idea.

[gaffer73] 06/3/2020 07:46

This situation is completely different to the banking crisis so you can't compare prices from then to now. Lloyd's flew through the stress test.

[essentialinvestor] 06/3/2020 07:45

Ek, appreciate the detailed reply, many thanks.

[pugugly] 06/3/2020 07:45

Ekuuleus, Some very good points - Could apply (imo) to ALL remaining old banks such as NatWest - RBS etc,

[gotnorolex] 06/3/2020 07:43

Arise StMinerve you have been beatified!
Don't backslide!

[ekuuleus] 06/3/2020 07:42

The ftse is weighted by shares in issue - so it doesn't come off the ftse performance. Makes tracker funds underform.

[ekuuleus] 06/3/2020 07:40

shares in issue Nov 2011 about 68M, share price 23p. Peaked over 72B last year but share buy back has helped. so over 8 years, 5.8% increase in shares. That comes off the share performance.

[pal44] 06/3/2020 07:39

corona she will go away in a month just watch ..

[ekuuleus] 06/3/2020 07:33

tricky. I saw no financial reason for it to go to 23p 7 or 8 years ago. Judging between financials and sentiment it the trick really.

The basic business is solid, and the government has a vested interest in this not going bust. The government has no interest in controlling the share price.

Lloyds is basically in a saturated market. It has limited potential for growth, either organically or, due to competition law, by take over.

This probably causes some excess risk taking on large corporate loans, such as Carillion which cost lloyds £100m's. (£500m?).

A downturn in the economy could wipe out many billions of corporate loans.

Then there are existing frauds. Reading has not worked it's way through. Mood music seems to have brushed it under the carpet so probably Noel et al have got what they want - which would be a 9 digit cost to the bank. Bristol seems to have another case so generally, an on going issue.

Interest only mortgages seem to be vulnerable. Personally, PPI was a mass fraud, so the banks got what they deserved. Interest only, I don't see any fraud there. The customers need to pay the loan back and I don't think there is any case where the customer could claim for mis-selling such a basic product.

House prices are well over valued compared to income. Any house price decrease will force CET1 up, potentially many billions. Even if everyone carries on paying their mortgage, it could make the bank insolvent.

In that respect, the government has no choice over house prices - it has to ensure house prices are always upwards so I see little risk there. On the other hand, low interest rates cause profitability issues.

Car loans are potentially over exposed. Again, any downturn could lead to large impairments.

Stock markets are very over valued on many measures. QE did not resolve the 2008 crash. We have built up massive systemic risks to the system. It was ready to pop!

Corona virus in of it's self was jut pulling the trigger on the bubble. It is also a supply and demand shock. Car sales in Chine dropped 89%. Fuel use significantly down.

For all it's impatience, the financial markets can be very slow to react. This will take 3 months for corporates to report in their financial results. Corporates such as flybe that were already in trouble will crash sooner.

Brexit is also weighing heavily on expectations for the economy and was already dragging Lloyds down. I figure that the potential corporate failures from corona virus is expected to cost Lloyds billions in loans. The knock on effect to personal finances will impair items such as car loans and mortgages. That will start dragging house prices down, and a small reduction in housing if 2% of the population succumb would force CET1 up by billions.

From a chart prospective, the trend is your friend. With all the above, I think it continuing into the 30's and possible 20's quite possible. It's a fundamentally a solid company. Those fundamentals get stronger the lower the price.

It's also worth noting that Lloyds uses the stock market to pay staff. It typically issues 1 to 2% per year in new shares. Any valuation or assessment needs to take account of that yearly dilution. Firstly, because it is a dilution, and secondly, because the stock market is subsidising Lloyds profits. That is to say, it uses the stock market to pay staff, the difference added to the bottom line.

[essentialinvestor] 06/3/2020 06:51

Ekuuleus, what type of levels do you anticipate here?, Thanks.

[ekuuleus] 06/3/2020 06:35

hellscream, you are missing the point.

Governments job is not to make us rich, it is to keep us poor. People only work when they have to.

[mitchy] 06/3/2020 05:44

I feel this conversation is like an episode of "would I lie to you". The economy is healthy, life is peachy I can eat three hot dogs at a time and not put on weight.

[mitchy] 06/3/2020 05:40

News flash - just in lloy is a bank and as such 'debt' is GOOD. That is how banks make their money (until customers start going AWOL).

[mitchy] 06/3/2020 05:33

OK , I was being somewhat 'economical' with the data but we were still growing our economy (just)instead of contracting like most of the EU ,right?