Member Info for Dorfan

This may be a kicker for all banks. SP will fall, divi will fall etc etc

Labour could change the way the BoE pays interest on the £770bn of reserves it holds on behalf of commercial banks.

Interest on these reserves, deposited at the central bank as a result of the BoE’s quantitative easing programme, is now paid at the central bank’s benchmark rate of 5.25 per cent. 

Webb said the potential savings, if the BoE stopped paying any interest, could reach £40bn a year, though they could fall to £17bn a year as the BoE wound down its QE programme. 

In practice, any reform would probably still leave the BoE paying interest on part of the reserves but could be “a chunky source of revenue”, Webb said. 

MVarawa

‘ Keep an eye out, in the future for the loop holes the establishment/politicians/royalty will build in to make sure that they can access something physical. ’

Well let’s see if I can outwit them and make the right choices, I have a good list of areas to explore. Hopefully they won’t have the resources (man power and money) to close all my choices.

I like a good challenge.

MVarawa

“ One thing that you got wrong was your assumption that CASH will be King, there will be no cash, you will have bank credits, just numbers in a bank. ”

It was a bit of a tongue in cheek comment. Yet the credits scenario is also not appealing either.

I guess in order to prevent unnecessary funds being snatched by the next government I will have to start looking at converting my ‘credits’ into tangible physical items that are untraceable so that the kids can remove at the said time and then change them back into ‘credits’ for whatever they wish to spend them on. More than one way to skin a cat.

Asperger1

Well that was a depressing read. If they actually carried out most of those proposals it will surely kill buying a home and investing for retirement. We will all be renting so that will be a booming market.

The thought of actually taking everything from you on death is surely going to stop people getting a mortgage which has the knock on for banks/building societies. No point in investing in shares etc. We shall become a society where cash is king and squirrelled away for safe keeping and disappears to family on death.

Let’s hope it isn’t a total picture of doom and gloom.

LTI

Is it fair to say that if Labour tinker with taxing various aspects of the share world we could see shares dropping in value?

LTI

‘Shares in ISA's above a relatively low capital worth to be taxed as per outside of an ISA’

And what do you consider a low value if you put a wet finger in the air?

“ Where does this 35% discount come from? As far as I can tell rent to buy opens the possibility of shared ownership after 5 years, where the tenant is given the option to purchase a stake in the property.”

I believe now this discount is for Local Authorities owned property, not the private sector. The other information you posted explains it well for private landlords and I was originally thinking that the LA options applied to the private sector as well, which it doesn’t.

“ I thought the right to buy only applies to Local Authority tenants or Housing Association tenants? I t does not apply to private landlord tenants, and Lloyds will be a private landlord.”

OK, that clears it up, thanks. Was getting concerned for a while that this was going to be a disastrous venture for LBG.

I have been looking at R2B and if I have got this right it could be a disaster for LBG. My understanding as an example is if a tenant has been in two rental homes and had two different landlords they qualify for four years R2B. This tenant then moves into a LBG rental home and at the end of the year they have reached the five qualifying years to invoke the R2B.

So as an example this tenant is in a LBG home that was built new say for 400K, to keep things simple we will say at the end of year one it is still worth the same. The tenant now is wanting to buy the property and with the 35% discount they see a sum of 140k but the cap is 102k which means the tenant can buy the house for 300k. Very nice deal, wished I could have had something similar when we had a straightforward mortgage and paid for it in full!

In that first year let’s say the rental income was 20K and now LBG are forced to sell it at 300k, that translates into a thumping loss, how can LBG justify any loss like this to us the shareholders? In fact any private landlord is potentially not going to see the rental market being a fair business opportunity.

If I have this totally wrong I am happy for someone to explain it so that I understand how this benefits LBG and others.

“ Citra Living, part of Lloyds Banking Group, is to bring more than 150 new family homes to the rental market in Gloucestershire. ”

I assume this means that the tenants will have a right to buy after five years if they wish with a 35% (or with max cap) discount? I don’t see how this is going to benefit us as shareholders if LBG is forced to sell them again after such a short time scale. The amount they derive from rental income has the potential to be wipe out. Have I missed something?

“ LTI states below he has told the BoD that dividend will be 3p this year??”

He might be right that this years divi will be near the 3p mark. When the divi started after the Covid drought the BoD reduced it by nearly 40% to start at 2p. Then they announced as LTI said an handsome yearly uptick on the divi which is also correct at nearly 20% for the last two years.

This isn’t going to be sustainable for much longer as if they did it again we could be looking at a divi of about 3.3p for this year which somehow I doubt will happen but would gladly take it if they do. 3.3p takes us back to the level of about 2018. That is six years just to get back to a previous divi of value.

My gut feeling is that for the next two years the divi will increase by about 9-10% each year and then we will be looking at about 3.3p.

The only next step change upwards will be if the next two or three years sees a continuation of buybacks. If the shares in circulation comes in at 50B and the pot is the same as now then in three years time the divi could be around 3.6p a share. I could settle for that in retirement but of course would always like more but I feel that the 3.6p is more realistic and anything above that will be a bonus. May even see a special kicking in at this time.

Just my ramblings on ‘what if’

Only a matter of time when the next government decides to have a windfall tax on private investors if they think they a have too much and deriving an income they feel is not justified to them.

And what’s not to say the government of the day will requisition a lot of them for migrants and asylum seekers at the expense of Lloyds.

SUFX

“Looking forward to the next Dividend and hoping to see another increase year on year here :-)”

The ‘progressive’ dividend increase as it is called has been dependent on the buybacks and in fact isn’t costing LBG anything at all. The divi ‘pot’ made available I believe has stayed roughly the same. It means that less shares in circulation get more for the same outlay, a clever little ruse by our man.

So what happens in the future?

1/ As and when the buybacks end will see a continuation of a ‘progressive’ divi ?

2/ If not will the divi remain fairly static or could we actually see the divi reduce?

I think they are playing games with us.LOL

Where did I mention Brexit? Every time there are job losses Brexit is blamed, that is a very short sited excuse. These blast furnaces were planned to go before Brexit, it isn’t something recent. The main culprits I believe are costs and the drive for carbon reduction. The carbon brigade probably don’t have an issue with the closure, they are too busy saving the planet. Just for the record I would have preferred 5o have kept them running for the long term.

All companies are chasing the cheapest bottom line, blame China for cheap steel. Perhaps if we set tariffs in place a lot earlier it might have changed the outcome.

Both Labour and the Conservatives have been far too weak on trade, both believing that cheap goods promotes good competition, in reality that concept has ruined us.

Just look at the period we were in the EEC/EU and the amount of engineering/manufacturing we have lost. Companies like Vickers (shipping/aircraft/defence) slowly dismantled by overseas competition and a lot of it ending up in Europe. Then look at our bus and truck industry (Leyland/Bristol/ERF/FODEN) all gone to be replaced by Volvo/DAF/Bova/MAN) from Europe.

Confectionery now gone and also made in Europe.

The UK has systematically been dismantled by Labour and the Conservatives allowing foreign competition to easily acquire our businesses.

Perhaps someone can tell me where it has worked in the other direction, what large businesses here have purchased an overseas business, shut it down and moved it to the UK? I am struggling to find any. Again, look at our utilities, who owns most of them, it isn’t us. Shall I mention more?

Can anyone remember when the electric arc furnaces are up and running to replace the current Welsh blast furnaces? I seem to remember it may just be a few years.

Bizzybee

“ Labour has run Wales for over 20 years, are fully 100% responsible for NHS, economy, etc, and it is on its knees.”

Interesting how the Welsh looking/seeking/demanding to split from Westminster to be self governing but when things go pear shaped big time like the steel industry they respond as below looking/seeking/demanding to be bailed out by Westminster. What a joke.

Welsh Secretary David TC Davies said: "If 3,000 people are going to lose their jobs, the UK government is not going to walk away, and not turn their backs on those people or that community."

Options on the table include cutting tax relief on pension contributions. This would leave current workers able to save less into their pension pots tax free.

Owners of more expensive homes may also face higher council tax bills, a policy that would hit many current pensioners who tend to live in larger, more valuable homes, according to IFS research.

Inheritance tax rules could also be tightened, making it harder for the elderly to leave money to their families after they die, without incurring a levy.

I see another shipping line is now not going to use the Red Sea for transporting goods.

Is this going to wipe out those recent gains on LBG shares next week and the stock market in general especially if others do the same?

Gunsup

Yep, and I am guilty of that as well. There are times when you are looking for something special and the only place it can be found is in China. So if I can’t locate that hard to find item on the net in the UK, there sure isn’t going to be a shop that has it in my local town.

So what is the answer to our declining towns? Some will say reduced or free parking, reduce business rates as a start, but I’ll be honest and say that will not convince me to go into town.

People have moved on, towns are history now. A lot of older people used are trying to hang on to the past. Younger people want to use free time for what they see as more important things like leisure and taking the family out.