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25/2/2021
09:03 | jordaggy: Shore Capital: Lloyds top pick among UK banks
Lloyds (LLOY) offers the best medium-term return prospects among its banking peers, according to broker Shore Capital.
Analyst Gary Greenwood retained his ‘buy’ recommendation and a ‘fair value’ target price of 44p on the stock, which closed up 0.3%, or 0.1p, at 39.3p on Wednesday.
Full year results from the bank showed a 70% crash in profits during the Covid-19 pandemic but it will resume paying a dividend after a nine-month government-imposed hiatus.
‘Lloyds’ shares have increased by 63% since hitting a pandemic low of 24p on 22 September. Our last published fair value was 44p, offering 13% upside to the current price, but we see scope to push this higher,’ said Greenwood.
‘We think Lloyds deserves a premium multiple as we view it as having the best medium-term return on tangible equity potential among the large mainstream UK banks given its bias towards structurally higher return retail banking.’
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25/2/2021
07:59 | xxxxxy: Lloyds Bank (LLOY.L) plans to reduce its office space by a fifth as part of a push towards flexible working.Lloyds said in its annual results statement on Wednesday that it planned to shut 20% of its office space by 2023. The move has been prompted by COVID-19, which the bank thinks will permanently change the way staff work.The majority of Lloyds' 60,000 staff moved to working from home last year as the pandemic struck. Chief financial officer William Chalmers said a recent survey of employees found 77% wanted to work from home at least three days a week even after the pandemic subsides.READ MORE: Lloyds Bank profit crashes 70% due to COVID but dividend returnsThe finding has prompted Lloyds to consider cutting back office space and rethink the space that remains. Chalmers said the bank would "ensure that the workspace is fit for purpose in an environment in which colleagues want to come to work to collaborate rather than necessarily sit at their desks on their own"."We will create a purposeful and future-ready workspace for all," he told journalists on a call.Lloyds is the second major bank to announce an overhaul of its office footprint in as many days. HSBC (HSBA.L) said on Tuesday it would look to cut 40% of its office space in the coming years as part of a cost saving drive.Lloyds chief executive Antonio Horta-Osorio said the ability to work from home would depend on staffs' roles at the bank.READ MORE: HSBC plans to slash office space post-COVID"For example, somebody working in the accounting department can by definition work more time from home than a colleague that is in a branch serving customers," he said.Horta-Osorio said staff would not be forced to work from home if they didn't want to."If you live in a house where you can have space to work, you probably would like to be more flexible in terms of working than if you live in conditions with a bigger family or many people at the house and its difficult to work in normal circumstances," he said."We want to make a match between the bank's needs, depending on the function as I said, and the people's individual preferences."READ MORE: Barclays CEO: Packed Canary Wharf offices 'may be a thing of the past'The COVID-19 pandemic has prompted a seismic shift in the way the world works and companies are considering which aspects to keep when life begins to normalise. Horta-Osorio said he believes having a flexible approach to work locations would be "critical" in attracting top talent in future."I think this will be critical going forward in the way people choose who to work for," he said.WAT... Yahoo Finance...... Bore da...
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24/2/2021
18:20 | crazi: Lloyds boosted by sharp fall in bad loan provisions
UK retail bank beats analysts’ forecasts and aims to double profitability this year
Lloyds is the latest UK lender to beat expectations in the fourth quarter © Jason Alden/Bloomberg
Lloyds Banking Group said it would aim to more than double its profitability this year as the UK economy recovers from the impact of the coronavirus pandemic, after it became the latest major British lender to report more resilient fourth-quarter results than expected.
The UK’s largest retail bank on Wednesday set a target return on tangible equity of between 5 per cent and 7 per cent for 2021 — comparable to its level in 2019 and far higher than the 2.3 per cent achieved in 2020.
William Chalmers, chief financial officer, said Lloyds and the wider economy’s recovery would be helped by the fact that the UK’s Covid-19 vaccination programme and the lifting of coronavirus restrictions were both progressing faster than the bank had predicted.
The improved outlook came as Lloyds reported a pre-tax profit of £792m for the final three months of 2020, compared with an average analyst forecast of £471m.
All four of Britain’s largest retail banks — Lloyds, HSBC, Barclays and NatWest — outperformed analysts’ expectations in the fourth quarter thanks to a sharp drop in provisions for future loan defaults.
Lloyds set aside £128m for new impairments in the fourth quarter, bringing its total for the year to £4.2bn — below its previous guidance. Revenues were £3.6bn, down 12 per cent year on year.
The bank followed its main rivals in announcing the maximum full-year dividend payout allowed under the Bank of England’s current restrictions designed to preserve banks’ capital during the pandemic.
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Unlike Barclays and NatWest, Lloyds did not provide an explicit figure for how much money it would return to shareholders after restrictions are lifted, but Chalmers stressed that it had “a very strong capital position” and said it would consider whether to resume share buybacks at the end of the year.
The results marked the final full-year figures under outgoing chief executive António Horta-Osório, who will leave Lloyds at the end of April after a decade in charge to become chairman of Credit Suisse. He will be replaced by HSBC executive Charlie Nunn, though the bank said on Wednesday that Nunn would not arrive until mid-August. Chalmers will serve as acting chief executive in the interim.
Horta-Osório said: “I feel I will be leaving the bank in a better position than it was in when I joined, which should be the purpose of any CEO.”
The uncertainty created by the pandemic and the impending change of chief executive meant that Lloyds did not present a detailed three-year strategic plan after reaching the end of the last strategy in 2020. However, the bank did outline a number of priorities, including strengthening its focus on recent efforts to expand its insurance and wealth division and invest in digitisation.
The bank also said it would strengthen its investment banking unit, which is much smaller than at the other so-called Big Four UK banks. Chalmers said Lloyds would focus on foreign exchange and sterling rates products for its existing corporate clients.
“We see a large number of our clients who transact away from us, so we see an opportunity to improve our performance,” he said. “I think we can go a long way in terms of digitising processes, making products more accessible and improving our share of business with them.”
Lloyds will also invest more in its payments services to increase revenues from business customers.
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24/2/2021
07:42 | jordaggy: Lloyds Bank (LLOY.L) announced a new strategy on Wednesday as it reported a slump in annual profits but reinstated its dividend.
Lloyds reported a pre-tax profit of £1.2bn on income of £14.4bn for 2020. Analysts had predicted profits of £905m ($1.2bn) on income of £14.2bn.
Profits fell 70% year-over-year. The bank was hit by provisions for credit losses, linked to the COVID-19 pandemic. Lloyds set aside £4.2bn in 2020 to cover an expected spike in bad loans, including a £128m charge in the fourth quarter. £4.7bn in impairments had been expected for the year.
Chief executive Antonio Horta-Osorio said the impact of COVID-19 had been "profound".
"The Group's unique business model, customer focused strategy and transformation in recent years positioned us well to respond effectively to the needs of our customers in 2020," he said. "At the same time, the Group’s financial performance in the year has been impacted by the pandemic."
While provisions dented profits, the bank was boosted by strong mortgage and deposit growth. A temporary stamp duty holiday spurred a boom in the UK property market and Lloyds grew its house lending business by over £7bn.
Lloyds announced a final dividend of 0.57p. City analysts had forecast a payout of 0.53p per share, following the Bank of England's decision to lift a COVID-era dividend ban in December.
Horta-Osorio, who will step down in April after ten years in charge, unveiled a new strategy alongside the annual results.
The bank said it had successfully completed its "Help Britain Prosper" three year plan and would now move on to a strategy dubbed "Help Britain Recover". The bank will look to expand its retail, insurance and wealth, and commercial banking businesses "to build the UK’s preferred financial partner." Lloyds will invest £900m this year on technology, data, and payments.
As part of its plans, Lloyds aims to cut its office space by 20% by 2023.
"Looking forward, significant uncertainties remain, specifically relating to the coronavirus pandemic and the speed and efficacy of the vaccination programme in the UK and around the world," Horta-Osorio said.
"I remain confident that the Group’s clear purpose, unique business model, significant competitive advantages and the customer focused evolution of our strategy we have announced will ensure that the Group is able to Help Britain Recover and in so doing, help transition to a sustainable economy.”
Horta-Osorio was paid £3.4m last year, Lloyds said, a 30% drop on last year. The Portuguese chief executive saw his total compensation cut by 28% in 2019 to £4.7m following outcry over his remuneration package.
Lloyds bankers received no bonuses last year as the bank's performance did not meet targets last year. Lloyds said total take home was flat for half its start thanks to above-inflation pay rises last year and a one-off £250 recognition award last summer.
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24/2/2021
07:15 | goldpiguk: Dividend
Following a request made by the PRA to large UK banks in March 2020, the Group suspended the payment of dividends on ordinary shares for the remainder of the year and cancelled the payment of the final dividend for 2019. These actions were undertaken as a precautionary measure to preserve capital as the spread of the coronavirus pandemic led to a UK-wide lockdown, with the potential to create a significant and prolonged downturn.
In December 2020, the PRA announced that dividend payments could recommence, provided that this was subject to a prudent framework for the setting of such distributions. As a result the PRA has established a cap on distributions for year end 2020.
Given the Group's strong capital position at the year end and the regulator's clarification that banks may resume capital distributions, the Board has recommended a final ordinary dividend of 0.57 pence per share, the maximum allowed under the PRA's guidelines.
The PRA has additionally noted its intention to provide a further update on distributions ahead of the 2021 half year results for the large UK banks. It is expected that the PRA will take account of the outcome of the first stage of the Bank of England 2021 solvency stress test exercise in informing its approach to half year distributions. Ahead of the update at half year, dividends may be accrued for via capital, provided this is undertaken on an appropriately prudent basis, but may not be paid.
The Group will update the market on interim dividend payments with the half year results, following receipt of the update from the regulator and based on macroeconomic conditions at the time.
The Board remains committed to future capital returns. In 2021, the Board intends to accrue dividends and resume its progressive and sustainable ordinary dividend policy with the dividend at a higher level than 2020. As normal, the Board will give due consideration at year end to the size of the final dividend payment and any return of surplus capital in addition to the ordinary dividend, based on circumstances at the time.
xd 15th April 2021
record date 16th April 2021
Payment date 25th May 2021
Goldpig
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21/2/2021
20:37 | stonedyou: Lloyds’ share price could make it one of the best dividend shares to buy now.
The Lloyds Banking Group (LSE: LLOY) share price has fallen by 30% over the last
year, lagging the FTSE 100 by 20%. Lloyds hasn’t paid out a dividend since
September 2019 and is only expected to declare a tiny final dividend for 2020.
Despite all of this, Lloyds’ depressed valuation has got me interested. I expect
the bank’s profits and dividend to recover strongly in 2021. Broker forecasts for
this year suggest the stock could offer a dividend yield of more than 4%, with
another big increase expected in 2022.
https://www.fool.co.uk/investing/2021/02/20/lloyds-share-price-could-make-it-one-of-the-best-dividend-shares-to-buy-now/
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02/2/2021
14:46 | cobourg1: The Lloyds share price experienced a rocky ride in the last 12 months, falling from pre-pandemic highs of 58p to lows of 23.98p. A rally at the end of 2020 has prompted analysts to consider the upside potential in Lloyds for 2021.
Daniel Smyth | Financial Writer, London | Publication date: Monday 01 February 2021 14:52
Dividend payments could return in 2021
Risk rating attached to Lloyds is reducing
What are the signs Lloyds has the funds to absorb losses?
The value of the Lloyds (LLOY.L) share price has pared some of the gains from the back end of 2020, falling from highs of 39.50p in November to 33p at the end of January. Nevertheless, there is renewed optimism for a more sustained rally in Lloyds shares for 2021, just a few weeks ahead of the bank’s full-year results for 2020.
With Lloyds set to publish the full picture of the effects of Covid-19 on its 2020 operations on 24 February, attention is already turning to what the outlook is for the UK’s largest retail bank.
Could Lloyds dividend return for shareholders in 2021?
Lloyds' last dividend – pre-pandemic – was 3.2p per share. Anything similar this year would therefore represent a much greater dividend yield, given that the Lloyds share price has almost halved.
In December 2020, the Bank of England’s (BoE’s) Prudential Regulation Authority enforced a temporary ban on dividend payments to the shareholders of the UK’s ‘big five’ banks, including Lloyds. That ban has since been lifted, prompting excitement among Lloyds shareholders.
Do risk factors appear to be diminishing for the Lloyds Banking Group?
Understandably, investors marked down the potential value of Lloyds assets based on the increasing default risks posed by the Covid-19 pandemic and subsequent lockdowns. The threat of a no-deal Brexit was also looming large on the horizon. Fortunately, a Brexit trade deal was agreed upon, and the UK is forging ahead with its bold nationwide vaccination programme; which analysts believe to be positive signs for the Lloyds share price.
As evidence of this, both Barclays and Deutsche Bank have lifted their price targets for Lloyds in recent weeks. After their own shares rallied off the back of Covid-19 vaccine news early in December, Barclays analysts reported that Lloyds’ recovery promises to be ‘bumpy’ and that the ‘situation remains fluid’. Meanwhile, Deutsche Bank analysts anticipate that there are ‘brighter days ahead’ for the UK retail banking sector as a whole.
Lloyds also appears to have an encouraging risk profile for the year ahead. Its capital ratio, last recorded at the end of quarter three (Q3) of 2020, was 15.2%. As this represents the amount of capital the bank has access to absorb losses and continue to lend to customers, this illustrates quite a positive surge. The ratio is, surprisingly, up from 13.8% at the beginning of 2020.
From Bloomberg via IG.com
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21/1/2021
14:00 | optomistic: hTTps://ukinvestormagazine.co.uk/lloyds-share-price-further-upside-potential-in-2021/?mc_cid=e8236dd4ba&mc_eid=f6e9184e22
A little something to read on a dull day....
The Lloyds share price (LON:LLOY) staged a white-knuckle ride of a rally in late 2020, before making a retracement into the close of the year.
Despite the sharp pull-back, Lloyds has more to offer investors in 2021 with shares valued attractively and the prospect of a UK economic recovery likely to boost sentiment around Lloyds shares.
As we have previously noted when analysing Lloyds, valuing Lloyds by their profitability during the pandemic can be a perilous pursuit as UK banks’ profits have been ravaged by the Black Swan event of COVID-19, making the past 12 months earnings a poor barometer of earnings in the future.
In addition, profits over the next couple of quarters will be unpredictable and largely correlated to short-term government decisions on economic lockdown restrictions.
We would look to the book value or net asset value of Lloyds as the foremost valuation methodology.
Lloyds shares
During the pandemic, investors have effectively marked down their perceptions of what Lloyds assets are worth due to the risks of default caused by a severe economic downturn.
The Lloyds share price fell as low as 24p in 2020, before recovering.
Now that the worst of the economic uncertainty is behind us with the roll out of vaccines, the market is likely to reduce their risk rating attached to Lloyds shares as the chances of significant rates of default diminish.
The end of the furlough scheme and changes to taxes in the UK still pose potential threats to the underlying health of the UK economy, and Lloyds profitability, but these are favourable when compared to a protracted pandemic and lockdown.
With Lloyds shares trading at roughly 50% of the Book Value of the company, there is plenty of space for shares to move to the upside and back in line with historical averages.
Lloyds Dividend
There is also the prospect of the bank resuming the payments of dividends in the near term. Lloyds, along with all other UK banks, ceased the payments of dividends after a warning from the Bank of England they must conserve cash to see them through the coronavirus pandemic.
With the pandemic seemingly moving towards its final stages after the approval of the third vaccine in the UK, The Bank of England have lifted guidance against paying dividends meaning Lloyds are now free start paying dividends again.
Investors should expect dividend guidance in Lloyds next update, but also understand the resumption of dividends will likely be gradual over the coming reporting periods.
Nonetheless, the additional buying pressure from income investors returning to the stock will provide support for the share price going forward.
The combination of anticipation surrounding the Lloyds dividend and the low Price-to-Book valuation means the 2021 trading year is likely to be a positive one for the Lloyds share price, discounting any unexpected bad news concerning coronavirus.
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11/1/2021
14:27 | diku: $ up Lloy down..$ down lloy down...£ up lloy down..£ down Lloy down...FTSE up Lloy down...FTSE down lloy down...Brexit or no Brexit Lloy down...is there anything LLoy is not connected to?...should have sold off Scottish Widows when the going was good...return shareholder value back to shareholders...instead insiders share options galore...
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07/1/2021
18:13 | cobourg1: Lest we forget!
"For me, Lloyds offers one of the highest exposures to post-pandemic recovery, yet at relatively low risk. Although it will make a loss in 2020 and pays no dividend at present, this will change in 2021. News of the resumption of quarterly cash dividends could come as soon as next month. When dividends return, these shares will look much more attractive. And this news should inject new life into the Lloyds share price. Finally, Lloyds has a rock-solid balance sheet stuffed with low-risk home mortgages. Thus, for me, it’s a one-way bet on recovery. That’s why I’d happily buy these shares today, ideally inside my ISA, to enjoy a lifetime of tax-free dividends and capital gains!"
Motley Fool
I know this will be immediately sneered at by the one line smart Alecs, but it's also my view and is why I am fully invested in Lloyds.
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PLUS1
