Shares in Lloyds Banking Group should hit 100 pence after transforming"from a bailed out bank to a strong UK franchise ... at a time when investorsare looking for ways to play a UK recovery," Bernstein analysts say.
Lloyds shares rise 2.4 percent to 74.3 percent, raising the prospect Britainwill start selling its 39 percent stake soon. Britain paid an average of 73.6p ashare in its 2008 bailout, although the stake sits on the government's books atjust 61p a share. It could sell a 4-6 billion pound block of shares any time,bankers say.
Lloyds is enjoying a rebound in consumer confidence in the UK and a dominantdomestic market position, and its net interest margin should rise to about 2.4percent by 2015 from 2.09 percent this year to drive earnings higher, Bernsteinanalyst Chirantan Barua says.
"Our upside thesis is not a call on massive loan growth - in fact we havejust 2 percent for the bank even in 2015. It's more around margin expansion andsigns of life in the fee line as retail and commercial customers starttransacting again," he says in a note.
Reuters messaging rm://steve.slater.thomsonreuters.com@reuters.net (Reporting by Steve Slater)
Lloyds (LLOY)