I can't understand why AHO won't declare a dividend. Why does he need the PRA's permission? Each quarter, he has the responsibility of sending the regulators the returns which show the Bank's ratios, which should be above a certain minima. If he can pay a dividend (which will reduce free cash and reserves) but still comply with the minimum ratios, what is to stop him declaring a dividend?
Perhaps you have a point LLOY is not a short term punt. That said I would disagree with you on the impact of interest rates. The BOE has no where to run as interest rate decsions have in essence been taken out of their hands given global effects. Carney may want to raise rates but he has little scope to do so and even if they did long term rates would be well well below where they have been historically.So I dont buy your default scenario I am afraid and you over look the fact that the margin between wholesale rates and loan rates are pretty decent right now and the banks are doing just fine. Sure we have had a lot of headwinds and there may be more to come but I think the reaction you have seen in the market is that investors are beginning to see a company that is beginning to make decent profits despite have alot of politically motivated c~ap thrown at by theregulators and HMG. as for fracking yeah could not agree more. I used to in my old day job and a decent programme would solve alot of pressing issues. Unfortunately we have Government which spends too much time and resources placating a few fringe, noisy pressure groups while afraid to tackle the critical issues than matter to the majority. Sadly therefore I feel you will have to be even more patient to generate adecent return on a fracking good investment than a recovering bank. GL
Certainly seems like that in cloud cuckoo land called LLOYDS! The bullets were flying yesterday. Blowing the froth off the Q3 results - phew - what a bluster. Back to normality now. Have to admit I am now playing the same game as Meerkat, running short between 73 and 76p from now on. Had enough of "Waiting for Godot! Lord Harry has the right idea in the long run, I don't think anyone can deny his musings EXCEPT the problem with this forecast is that LLOY has no control over third party inputs, like (for instance): Milipede or Balls running the country - think what that would do to the SP! More worrying however (from a long term perspective) is the inevitable rise in interest rates. I firmly believe this will have a major detremental effect on LLOY as more and more people default on their mortgages at worst...and less and less people taking out loans at best. LLOY sells 2/3 of all mortgages in the UK! Future profits will be hammered methinks, especially in the 5 year period Lord Harry goes on about. Once the GE, HMG and divi return is resolved (say a year from now)...I'm outta LLOY for good. Too many uncertainties in the economy for LLOY to be competitive I think. I think one area which will come good - big time - is Fracking...look to these companies who are vying for licences - this will become a massive industry in the next 5 yrs. Good viz. mild. light wind. SS2. GLA
In addition to the PPI problem.... "the bank also faces huge costs associated with the wrongful sale of interest rate protection products, and many commentators have noted that the final bill here could even exceed that of the PPI problem."
Just how much more is there we don't know about? .... Comments invited on the above.
Lloyds is my long term bet, and I will be buying more in the near future as long as the share price is in and around 75p. I am looking towards a 4/5 year time period, as I feel the share price by then should be much higher. Lloyds are doing the right thing with regards to the high street branches, a vast amount of money will be saved by ditching them. Also at some point in the future a dividend will be given, and the government will sell off its remaining shares and we will stop hearing about how Lloyds is owned by the tax paying public etc which always brings negative press. Also with all this house building, the mortage market should increase.What do other people think, a share price of 1.90 to 2.20 in 5 years ?
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