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Lloyds (LLOY)

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idpickering
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Re: Lloyds (LLOY)

#250427

Postby idpickering » September 9th, 2019, 7:13 am

UPDATE ON PAYMENT PROTECTION INSURANCE

At our half year results on 31 July 2019, the Group reported a PPI charge for the first half of 2019 of £650 million, with an unutilised provision of £1,083 million relating to complaints and associated administration costs. At that time, the Group also stated that its provision was based on the assumption that PPI information requests ('PIRs') continued at the elevated level of around 190,000 per week until the deadline for submission of claims on 29 August 2019.


And later regarding suspending of share buy backs;

In line with its prudent approach, and the uncertainty around the final outcome for PPI, the Board has decided to suspend the remainder of the 2019 buyback programme, with c.£600 million of the up to £1.75 billion programme expected to be unused at mid-September. In line with normal practice, the Board will give consideration to the distribution of surplus capital at the year end and continues to target a progressive and sustainable ordinary dividend. As previously reported, the Board's view of the level of capital required by the Group to grow the business, meet regulatory requirements and cover uncertainties reduced earlier this year from around 13 per cent to around 12.5 per cent, plus a management buffer of around 1 per cent.


https://www.investegate.co.uk/lloyds-ba ... 00086251L/

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Re: Lloyds (LLOY)

#250433

Postby funduffer » September 9th, 2019, 8:19 am

The good news from a HYP point of view is LLOY intend to target a

a progressive and sustainable ordinary dividend


I never care much for share buy-backs, so despite this not being good news, I am happy with the response.

FD

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Re: Lloyds (LLOY)

#250436

Postby monabri » September 9th, 2019, 8:33 am

"In the final month the Group received approximately 600,000 to 800,000 PIRs per week"....so, they had perhaps 3 million claims in a single month..? Sounds like "chancers" having a go!

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Re: Lloyds (LLOY)

#250441

Postby tjh290633 » September 9th, 2019, 8:48 am

There is also a reference to the "low quality" of many of the claims. They do not say how many are rejected.

Good that they have suspended buy-backs. Should never have started.

TJH

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Re: Lloyds (LLOY)

#250447

Postby Dod101 » September 9th, 2019, 9:12 am

Were I a holder of Lloyds I would probably read their announcement differently, but to me the suspension of the buybacks and their aim for a sustainable and progressive dividend are not connected. They appear to be suspending the buybacks as a precaution against more PPI claims payments and will take another look at the issue at the year end.

Dod

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Re: Lloyds (LLOY)

#250620

Postby monabri » September 9th, 2019, 9:51 pm

Interesting that the share price finished higher today. I wonder what steps are taken to prove whether claims are genuine?

idpickering
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Re: Lloyds (LLOY)

#261183

Postby idpickering » October 31st, 2019, 7:09 am

IMS here for general chat; https://www.investegate.co.uk/lloyds-ba ... 00057077R/

Also over on HYP Practical for HYPers.

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Re: Lloyds (LLOY)

#267583

Postby idpickering » November 27th, 2019, 10:00 am

Halifax goes digital to take hassle out of content insurance

Two-thirds (62%) of UK renters risk not being able to replace their possessions if they were damaged or stolen because they do not have contents insurance.

This is against a backdrop of increasing numbers of renters overall. The number of households renting in the UK has risen from 2.8 million in 2007 to 4.5 million in 2017, an increase of 63%, according to the Office of National Statistics.

Young renters are especially at risk, with research from Halifax Home Insurance showing that while 42% of 25-34 year-olds rent their home, three quarters (70%) of this group do not have contents insurance in place.

The biggest turn off for renters is the perceived cost of cover, with 40% identifying this as the major blocker. The next turn off is that people don’t think their possessions are worth enough to insure them (26% of renters).


https://www.lloydsbankinggroup.com/Medi ... tmessage=1

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Re: Lloyds (LLOY)

#271525

Postby Breelander » December 16th, 2019, 6:04 pm


idpickering
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Re: Lloyds (LLOY)

#285555

Postby idpickering » February 20th, 2020, 7:23 am

LLOYDS BANKING GROUP PLC - ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2019

https://www.investegate.co.uk/lloyds-ba ... 00075462D/

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Re: Lloyds (LLOY)

#285836

Postby dealtn » February 21st, 2020, 10:21 am

This RNS is a better link as it contains all the relevant information, and is indexed for simplicity.

https://www.investegate.co.uk/lloyds-ba ... 00075457D/

This should be the last set of accounts to contain charges for PPI, which will make things easier, at least visually, to compare statutory and underlying numbers. With the accounts broken down into quarters, you can see the zero for PPI in Q4 with the August 31st deadline in Q3.
With the PPI payout rising this year, and underlying profits broadly unchanged little improvement to the balance sheet and capital ratios has occurred this year as the dividend paid has taken most of the profits out of the company. You can understand why the company has wanted to maintain the progressive dividend payout, as it can see through short term nature of the PPI provisioning, but I’m sure they will be happier going forward knowing that more funds will be available for other means. I think we can expect to see more buy backs now, with the resulting fewer shares boosting eps going forward. “Other Equity Instruments” might also continue to fall as maturities occur.

The Bank continues to see itself as a low risk UK centric one. You can argue whether such lack of diversification is in fact a benefit, but at least, for a bank, it is a simple objective. With the UK now arguably more exposed as an economy post-Brexit this might be a concern. Credit quality has deteriorated slightly, but this is as much with the transition to riskier lending than a reflection on the UK economy’s performance I would argue. There are 2 large credit downgrades requiring impairments in the Corporate Banking book, and more caution, and provisions in the car finance leasing book from what I can see.

Looking forward you can envisage distributable earnings being above £5bn, which with a market capitalisation of around £39bn gives a sub 8 P/E, which even for an undiversified UK bank looks cheap. I suspect the wider market will want to see evidence the UK economy isn’t suffering from the Brexit woes before it adjusts though. Indeed it is more likely to fret about the next Brexit deadline, with the trade negotiations starting, than it is to price in the recent boosts to consumer and company confidence we have seen.

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Re: Lloyds (LLOY)

#285861

Postby dealtn » February 21st, 2020, 11:19 am

dealtn wrote:
The Bank continues to see itself as a low risk UK centric one. You can argue whether such lack of diversification is in fact a benefit, but at least, for a bank, it is a simple objective. With the UK now arguably more exposed as an economy post-Brexit this might be a concern.



Market reaction to the Lloyds and Barclays updates this week, whilst only a short term one, might be demonstrating these concerns, with the latter being more international, and having a greater spread of finance activities (Investment Banking having a greater commitment than at Lloyds, for instance).

Lloyds shares mildly down (2.5%), versus Barclays mildly up (2.5%), over the course of the week.

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Re: Lloyds (LLOY)

#296804

Postby TheMotorcycleBoy » April 2nd, 2020, 5:14 am


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Re: Lloyds (LLOY)

#296821

Postby johnhemming » April 2nd, 2020, 7:20 am

The news in this for me is that Goldmans predict Lloyds will make a profit this year.

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Re: Lloyds (LLOY)

#296868

Postby dealtn » April 2nd, 2020, 9:51 am

TheMotorcycleBoy wrote:Forecasts slashed:
https://www.proactiveinvestors.co.uk/co ... 16222.html


Not much more than a headline without access to the research to investigate it. Interestingly this appears to be on the "slash" outcome, and there is mention of better outcomes. Even on this outcome their "sell" rating has a target price above the current market price.

idpickering
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Re: Lloyds (LLOY)

#304338

Postby idpickering » April 30th, 2020, 7:37 am

Q1 2020 Interim Management Statement

Supporting customers and colleagues in difficult times

· Actively supporting retail, small business and commercial customers in the current environment through a range of flexible propositions and full support for Government schemes, including Coronavirus Business Interruption Loan Scheme (CBILS) and Covid Corporate Financing Facility (CCFF)

· Strong operational resilience with c.90 per cent of branches remaining open and ATM availability exceeding 95 per cent

· Multi-channel distribution model, with the UK's leading digital bank enabling the Group to continue to serve customers throughout the lockdown

Financial performance reflects revised economic outlook

· Statutory profit before tax of £74 million, impacted by a significantly increased impairment charge of £1,430 million given the revised economic outlook. Statutory return on tangible equity of 5.0 per cent with tangible net assets per share of 57.4 pence

· Solid trading surplus of £1,988 million, a reduction of 19 per cent compared to the first three months of 2019, but an increase of 7 per cent on the final quarter of 2019 (decrease of 4 per cent excluding the bank levy)

− Net income of £4.0 billion, down 11 per cent, with average interest-earning banking assets slightly lower at £432 billion, net interest margin of 2.79 per cent and other income of £1.2 billion, down 21 per cent year on year due to lower levels of client activity and the absence of 2019 one-off items

− Total costs of £2.0 billion down 1 per cent, after absorbing coronavirus-related expenses, driven by continued reductions in operating costs, down 4 per cent

· The impairment charge in the quarter increased significantly to £1,430 million, primarily driven by updates to the Group's economic outlook and some charges relating to existing restructuring cases. Given the economic outlook we will inevitably be impacted both within the existing book and potentially in the new lending we are undertaking to support our customers. However, the Group's loan portfolio remains robust and well positioned given its low risk business model

Balance sheet strength maintained with capital, funding and liquidity remaining strong

· CET1 ratio remains strong at 14.2 per cent with CCyB reduced to zero, resulting in increased headroom over regulatory requirements; significant resources to support customers while absorbing potential credit losses

· Loans and advances increased £2.7 billion in the quarter to £443.1 billion, with increased corporate lending, primarily drawdowns of existing corporate facilities, partially offset by expected reductions in the mortgage book along with reductions in credit cards, where customer activity reduced in March

· Loan to deposit ratio down 4 percentage points to 103 per cent, largely due to increased commercial deposits

Outlook

· Given the significant change in the operating environment and economic expectations the Group's previous guidance is no longer appropriate. The impact of lower rates, lower levels of activity and higher impairment on the Group's business will continue into the second quarter, but remains difficult to quantify given the significant uncertainty. The Group will update the market once there is greater clarity

· The longer-term impact of coronavirus remains unclear but the Group will maintain its focus on supporting customers and the UK economy while remaining well positioned to deliver for customers beyond the crisis


https://www.investegate.co.uk/lloyds-ba ... 00074005L/

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Re: Lloyds (LLOY)

#304540

Postby MaraMan » April 30th, 2020, 3:22 pm

I binned my Lloyds shares and replaced them, mainly off of the back of an article in the Telegraph, with Barclays. It made sense to me regarding a differentiator being their previously beleagured investment banking business and so anyway replaced my holding in Lloyds 9 days ago. Have been happy I did so far as its up 27%, but with the market the way is who knows what's next.
MM

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Re: Lloyds (LLOY)

#304545

Postby johnhemming » April 30th, 2020, 3:48 pm

The way I look at the UK banks is that I consider two things
a) Will they need to raise more capital
b) What should they look like after the Covid-19 stress.

If they don't need to raise more capital then it is only really where they are at in a year or so that drives their medium to long term price.

I don't think they will need to raise more capital.

In a sense, therefore, it is not that important how much profit they make this year as long as they don't make such a loss as to require more capital.

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Re: Lloyds (LLOY)

#304553

Postby scrumpyjack » April 30th, 2020, 4:13 pm

It can't make economic sense to raise more equity when the shares trade at almost half net asset value. Why would shareholders want to put more money in for such low returns?

It would make more sense to scale back their activities as much of their business seems incapable of making a decent return.

However, they seem very well capitalised, at least compared with EU banks. HMG scattering 100% guaranteed loans all over the place must also help reduce the bank's risk exposure.

I very much doubt they will raise more capital. Better to put dividends on hold for longer if need be.

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Re: Lloyds (LLOY)

#304562

Postby johnhemming » April 30th, 2020, 4:43 pm

scrumpyjack wrote:It can't make economic sense to raise more equity when the shares trade at almost half net asset value. Why would shareholders want to put more money in for such low returns?

Its a regulatory issue for Banks.


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