Lloyds Banking Share Discussion Threads

[skinny] 20/2/2019 10:56

We're virtually at yesterday's volume already.

[polar fox] 20/2/2019 10:54

Getting back above 60.50 is a real positive - I'm convinced this is a third wave in a sequence of five. More upside in due course.

[xxxxxy] 20/2/2019 10:43

Horseless carriages. The Ending as we have known it.


Lloy - I guess on the way to 80ish . I Think.


Honda loses out in Europe and worries about the change to electric cars
By JOHNREDWOOD | Published: FEBRUARY 20, 2019
Honda’s market share has fallen a long way in recent years in Europe. From selling 311,000 cars at the peak in 2007, last year it sold just 136,000. The Swindon plant is only running one of the two lines, and at under 150,000 cars a year it is a small plant by world standards. Honda Europe is one of the casualties of the top down electrification policy pursued by the EU and UK governments. As Honda explained :

“This is not a Brexit related issue for us. This decision has been made on the basis of global issues. We have to move very swiftly to electrification of vehicles, because of demand of our customers and legislation”.

Honda wishes to concentrate its investments in large plants making modern vehicles that meet changing legislation in the places where they sell most cars. That is Asia and the USA, not Europe, where their market share is now small. This is one example of the massive change being forced on the industry by governments with their requirement to sell many more electric vehicles. It is interesting that Honda mentioned legislation as an important factor, underlining that this abrupt change in the profile of cars to be sold results from a top down instruction from legislators as well as from some customers having a genuine preference for electric vehicles.

It follows hard on the heels of Nissan’s decision to make one of its diesel cars only in Japan without adding a UK line , given the big drop off in demand following adverse legislation and threats of more to come from government. Nissan does have decent overall volumes in the UK and is committed to further investment in its UK business.

I forecast particular difficulties for the UK car industry in 2017 when the Bank of England adopted a tough stance on car loans, and the government launched a tax attack on new vehicles whilst pursuing an anti diesel policy. This was particularly damaging to the UK based car industry which had built centres of excellence for clean diesel engine technology here in the UK with government encouragement. Investment in car production is a long term business. The big switch in UK government attitudes to diesels will have a price that goes beyond its obvious impact on the large section of our car industry that makes diesel cars. Companies want consistent support for the industry and a predictable legislative and tax background, whether they are making diesel or petrol vehicles.

I trust the government will explore alternative uses for the Honda factory and work for the workforce. It could get a contractor that supplies vehicles to the state and or does deep maintenance on public sector vehicles to undertake it there, for example.

[k38] 20/2/2019 10:38

Share buyback with the problem we are facing, Brexit that is, is a mistake from the top, and also,From experience, I never, in my lifetime benefit from share buyback. Investing in the business or increase dividends is good for us, small shareholders.

[mikemichael2] 20/2/2019 10:38

'Firing Boosters'

[keyno] 20/2/2019 10:35

Shiver me timbers - we're up! I was clearly wrong to say share price would go down today. Pity about share buybacks but you can't have everything.

[polar fox] 20/2/2019 10:30

A bit of early comment:

Analyst Laith Khalaf at Hargreaves Lansdown said Lloyds is "in good shape, despite what its share price performance might suggest", with the big jump in profits for 2018 almost all explained by falling charges for PPI compensation, while the bank "has managed to grind some extra income out of a static loan book, and has controlled costs while investing to become more efficient".

With Lloyd's high market share in key banking markets, the main chance for growth is from the strategic shuffle sideways into the financial planning and retirement market, said Khalaf. "This is an ambitious target seeing as the government’s automatic enrolment programme has already prompted a round of company pension switches. However the strategy makes sense to give Lloyds some diversification from its core banking activities, and allow it to spread its wings in another market."

With the share price not much different from when Horta-Osório took the reins in 2011, despite swinging from an annual loss of £260m to a profit of £4.4bn, Khalaf said this was because Lloyds is "indelibly plugged into the UK economy, and the shadow cast by Brexit means the bank’s shares are left out in the cold".

"If there’s a positive resolution to the current political uncertainty, we would expect the shares to rally. That’s of course far from a given, but with a prospective yield of 6%, shareholders are at least being paid to wait."

Shore Capital's Gary Greenwood said that despite the slight profits miss, he expected a positively investor response to the more favourable guidance and the better than expected share buy-back

For 2019 he was forecasting adjusted PBT of £8.5bn versus the City consensus of £7.9bn, with a dividend of 3.6p.

"Our initial take is that consensus earnings may edge up on the better cost and impairment guidance, whereas we may need to trim out forecasts slightly on the lower than we had expected NIM guidance."

Seeing fair value at 80p, Greenwood said the investment case for Lloyds "revolves around its ability sustain profitability while generating surplus capital and distributing this to shareholders by way of dividends and / or share buy backs, which it is currently delivering on. The main downside risk is a disorderly Brexit and the impact this may have on the UK economy, but this is not currently our (or the consensus) central case."

unquote

[grahamite2] 20/2/2019 10:15

Absolutely Alphorn and that presumably is the reason The City is unimpressed by buybacks - they suggest the company has nowhere to go.

[phil2003] 20/2/2019 10:08

Last visited this thread in 2008!!
Looking at my memo this time round (56.1p into SIPP) looks like the only time I’ve made any money on Lloyd’s..

60p resistance now looking weak

[alphorn] 20/2/2019 10:08

pf - may be. The question always is 'can you make more money expanding the business versus a buyback'? Their current strategy does not include any real expansion.

[jrphoenixw2] 20/2/2019 10:02

Thanks jpj, that was the info I was in 10minutes about to realise I had to find :)

Their website isn't updated yet...
'Description Final 2018
Dividend (per share) xxxp
Ex Dividend Date 04/04/2019
Record Date 05/04/2019
Payment Date 21/05/2019'

[jpjohn1] 20/2/2019 09:55

Lloyds ex- div. 4th AprilPayment 21st May. 2.14p

[jpjohn1] 20/2/2019 09:55

Lloyds ex- div. 4th AprilPayment 21st May. 2.14p

[polar fox] 20/2/2019 09:54

You guys who are talking about buybacks vs dividends, Culmer will probably retire about the time the half-yearly is published, in August. So Chalmers will have joined by then and have his feet under the desk properly for 2019's Results. The obvious question will be, will his arrival lead to a change of thinking? - perhaps a LITTLE more on dividend increases, rather than suppressing them in favour of buybacks?? We'll have to wait and see, come 2020.

Add: Half-yearly is 31 July.

[fatnacker] 20/2/2019 09:52

lmao grahamite

[alphorn] 20/2/2019 09:40

I don't think that he knows what he is talking about - just the most unpleasant rambling. I don't filter him on the basis that once in a blue moon he has something vaguely interesting to say.

Probably the cue for Devoid to appear miraculously.

[grahamite2] 20/2/2019 09:37

Jacko, politics is all very well but we're talking about money here!

[renewed1] 20/2/2019 09:37

5p a share dividend!!!!who is this d... Maybe in 20 years when Antonio has long been ousted.

[ttg100] 20/2/2019 09:31

Wall: And what's the third stock pick?

Buxton: The third stock is an old favorite of mine. It's Lloyds Bank. At the moment, it is sort of going up and down on Brexit news and perceptions. But I think, again, get beyond Brexit then actually the earnings power of this bank is in no way reflected in the valuation. It's a hugely capital generative bank now. The opportunity there for it to continue to both buy back shares and offer very significant dividend growth I don't think is reflected in the valuation. They still trade at a modest discount to book value.

Wall: And you hinted there – do you expect the dividend will be raised over coming years, because Lloyds used to be a stalwart of any income portfolio, but then it absolutely fell from favour?

Buxton: Yes, of course. No, I think, it very much will be able to crank out dividends. I mean, with the shares trading where they are today, I can understand why they are devoting some of the money to buying back stock. But I think at the fullness of time this is a bank that could be generating dividends of 5p a share perhaps, which you know, on today's 56p share price, you know, that's pretty compelling.

Wall: Richard, thank you very much.

Buxton: Thank you.

Wall: This is Emma Wall for Morningstar. Thank you for watching.

[patientcapital] 20/2/2019 09:28

Enhances EPS over time.

[bbonsall] 20/2/2019 09:26

Last year’s buyback, supposedly returning capital to shareholders, saw a 15% to 20% share price fall. How is that helping shareholders? I always prefer dividends to share buybacks because I can see the money being returnd to me.