No it Doesn't, the cash sale of the £2.6Bil loans was £827 Mil the price reflecting that 2.3bln of these loans were impaired - these assets made a loss in 2014 accounts of £130 million, and this transaction will not have any significant material effect, but will add about 7 basis points to lloyds capital ratios.
UK Banks are still not retaining enough capital fully expect the PRA to increase CT1R levels substancially in the coming months. The need for a substancial Share Back programme is now greater than ever unfortunately it will hold dividend growth back for quite some considrable time to come.
Am I right in saying that if these loans of £2.6billion had been impaired in previous years by 2.3 billion their value at the start of the year was effectively only £300million( with the losses/impairment already included in previous years) therefore the sale for over £800 million will effectively produce a half a billion profit to include in the next year end results and give a little higher dividend next year or am I just having a senior moment
Prove you understand your risks or hold more capital, banks told: Banks have to beef up their risk management controls or face the expensive consequences of building up bigger capital buffers, the Bank of England said, in the latest drive to make banks more stable.
Bit dissapointed with the Share Price rise today with the FSTE being up 75pts however i am still confident Lloyds will make the 87P-89P mark sometime before the close of trading on friday the City will have been probably been mulling over the Barclays numbers with (extra due diligence) today expect their attention to turn to Lloyds tomorrow and hopefully start to mark them up before the results are published. I will keep to my original forecast of a 2015 trading range of 84P- 88P and a full year dividend of 1.5 P that i stated on the chat board 15 months ago.
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