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Hi Eightyeight88 , I have also opened up a chase account. There is only a 6 digit security passcode to log in - thats it , nothing else . The security on the Chase account worries me a bit .
Thanks for your thoughts in advance
David
Rest of article
True, part of the premise for growth in the rental sector in general is that home ownership has become unaffordable for many, and the removal of government support will further that trend.
But other rental markets have a much bigger institutional component: the UK’s is about a 50th of the size of the US market, on a like-for-like basis. The London market has been volatile, but elsewhere the promise of steady growth correlated to inflation has born out: net rental yields are about 4-4.5 per cent in regional cities.
What is debatable is whether this is a “natural extension” to the bank’s business, as Lloyds has suggested. Retail banks are not actually big participants in more mature, overseas build-to-rent markets.
Sure, Lloyds knows housing. But not tenant management, which is where the reputational pitfalls lie. And the assumption by some that the end-game here is financing onward sales looks misplaced: the whole point (usually) is building a diversified portfolio to hold. Similarly, the notion of cross-selling other Lloyds products to tenants: there must be less tortuous customer acquisition strategies?
Lloyds is getting into housing equity, rather than debt, at a point when plenty of others looking for long-term, inflation-linked returns are doing the same. And Legal & General has committed £2bn in equity over several years towards a goal of 5,500 properties, which again puts the size and speed of Lloyds’ targets into perspective.
A strategic shift in search of returns into an at-best adjacent market seems the real risk here. That, and the plumbing, of course.
Look forward to a future when you can moan about your local bank branch closure and the plumbing with just one call.
Lloyds Banking Group, the UK’s biggest high street lender, is moving into the “build-to-rent” lettings market, with a goal of playing landlord to tens of thousands of UK families.
This is not just motivated by the undoubted appeal of fielding complaints about central heating on the blink. As much as anything, it reflects the difficulties in making money in what is a quasi-utility sector in the era of rock-bottom interest rates.
Banks’ hunt for new revenue streams is not new, of course. The UK sector is more heavily reliant on interest income than other markets. Capital is not currently a constraint. Bread-and-butter fare such as mortgages are facing rising competition and beaten-down returns — hence banks’ increasing focus on fee or commission-based businesses, like wealth management and insurance.
But shifting into build-to-rent is unusual. The term refers to institutional ownership of portfolios of new-build residential properties, where the end investor usually finances the development. It is currently a tiny slice of the overall UK market, which has 4.5m private rental properties overwhelmingly owned by individual buy-to-let landlords.
And the scale of what Lloyds is considering is striking, even if it has carefully played down its ambitions since launching private rental brand Citra this year.
Citra may be starting small, with 45 flats in Peterborough. But an internal job posting this month said it had a “strategic challenge” of reaching 10,000 properties by the end of 2025, with a further aim to hit 50,000 by 2030.
For context, the entire UK build-to-rent market consists of 62,000 homes, with another 40,000 under construction, according to Savills data. Grainger, the FTSE 250 company that is the UK’s largest private residential landlord, has about 9,000 homes.
Some concerns are misplaced. Lloyds will not be competing with eager would-be homeowners for property, nor really its commercial clients. In fact, it has struck a partnership with Barratt Developments.
What is effectively cheap development funding should mean that build-to-rent properties are net additions to housing supply and, because they are built to hold for decades, the homes tend to be higher quality. Build-to-rent also does not mean getting into social housing: that has to be done through a registered provider, which Citra is not.
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Under the loan scheme — rushed out by the government last year to try to support hundreds of thousands of smaller businesses at risk of collapse due to coronavirus restrictions — banks could offer state-guaranteed loans of up to £50,000. This leaves the taxpayer having to cover all losses.
Officials said they did not have estimates for what proportion of fraudulent loans were part of the £5bn figure.
Given all loans come with a 90-day repayment period, banks will have to start assessing early defaults in their portfolio in the coming weeks as repayments on the first borrowings started in June. Before pursuing recovery of the debt, however, banks are expected to seek to contact and work with the borrower. If the business cannot repay then the lender would look to trigger the state guarantee.
Companies were able to access the bounce back loans programme through a streamlined application process that came with only limited checks as it was designed to get funds as quickly as possible to businesses in trouble. This led to the large initial estimates of potential losses to the taxpayer.
Bankers say that default estimates for other emergency coronavirus loan schemes that came with more stringent checks were much lower. They estimate that the exposure to bad loans for the coronavirus business interruption loan scheme aimed at larger SMEs was less than 1 per cent.
Defaults on UK’s emergency Covid loans set to be up to £5bn
Failure by businesses to repay bounce back funds ‘nowhere near as bad’ as first feared
Between 5 to 10 per cent of small and medium-sized businesses that tapped the government’s £47.4bn ‘bounce back’
Daniel Thomas in London AUGUST 4 2021
As much as £5bn of state-backed government Covid emergency loans are at risk of not being repaid, according to estimates by officials and bankers, who said the initial data suggested that defaults would be much lower than initially feared.
The assessment is based on the first few months of debt servicing, which shows that so far between 5 to 10 per cent of small and medium-sized (SME) businesses that tapped the government’s £47.4bn ‘bounce back’ coronavirus support scheme have missed repayments.
But one government official said that indicative default rates were so far “not anywhere near as bad as all the gloomsters suggested” at the start of the pandemic.
Bankers said the stronger than expected economic recovery from the pandemic had helped companies regain their financial independence. One banking executive said that up to 5 per cent of all loans had already been repaid in full on the date that the 12-month interest free payment period ended.
“It’s a best guess at the moment but the initial signs are that the losses are unlikely to be in the tens of billions as feared,” the executive said. “It’s clear that not all loans were taken out of desperation but out of caution.”
But some bankers warned that the government could have pushed back the worst of the problems through its “pay as you grow” scheme, which offers repayment holidays of up to six months as well as extended loan terms of up to 10 years. The Treasury declined to comment.
The government last summer gave preliminary estimates that between 35 to 60 per cent of borrowers may default on the loans. The Office for Budget Responsibility (OBR) in December estimated that the guarantees behind the bounce back loans could cost the taxpayer as much as £19bn.
Under the loan scheme — rushed out by the government last year to try to support hundreds of thousands of smaller businesses at risk of collapse due to coronavirus restrictions — banks could offer
" - I don't believe in the whole gaps thing the same as I don't believe in chartist theories and technicals "
With all due respect , it doesnt matter what you believe in . Whether it is truly is a " science " or not , the market believes in technicals & trades it ... It becomes like a self-fulfilling prophecy as the market trades towards it .
Article dated 1 apr 2020
The dividend drought facing income investors worsened today as banks bowed to a demand from the Prudential Regulation Authority (PRA) to scrap dividend distributions in the coronavirus crisis.
Shares in Barclays (BARC), which has had to withdraw a £1bn distribution due on Friday, plunged 9%, as did HSBC (HSBA), sliding after a relatively stronger run through the recent crash than its peers.
https://citywire.co.uk/funds-insider/news/banks-forced-to-cancel-7-5bn-dividends-during-virus-crisis/a1342123
Banks
Lloyds: surplus capital is the mane event
Expect the bank to whittle down the surplus with diplomatic gradualism
Lloyds first-quarter surplus is more than £6bn, swelled by the UK’s improving economic outlook © Bloomberg
April 28, 2021 1:43 pm
The bank’s black horse supposedly canters to the pace set by Britons. Like all television advertisers, Lloyds overclaims — after all, heroism and family cohesion are not consequences of affordable mortgages. But the correlation between this dominant domestic retail lender and the British economy is high. The bank is therefore awash with capital it cannot easily spend at a time when many customers are too.
Lloyds first-quarter surplus was more than £6bn, Lex calculates, more than double total payouts to shareholders in 2019. The figure has been swelled by the UK’s improving economic outlook. The outbreak of optimism in Lloyds’ buttoned-down strategy department reflects the UK’s fast vaccination rollout.
The upgrade triggered a £460m credit. This helped lift underlying profits steeply compared with the fourth quarter, to £2bn. Mortgages have been selling briskly thanks to a stamp duty holiday. Customer deposits rose 8 per cent year on year to £462bn.
The capital of banks, as with Lloyds’s emblem, is a darker horse than the capital of the typical Brit. Lex’s £6bn surplus figure bakes in multiple assumptions. But the total will only go on rising if UK GDP grows 5 per cent in 2021 and again in 2022, as Lloyds expects.
Lloyds shares should be a screaming buy at their steep implicit dividend yield of almost 20 per cent. But there is no chance of the bank making hefty payouts while caps imposed by the Prudential Regulation Authority remain. Lloyds was only permitted to pay 0.57p per share for 2020.
Lloyds equity tier one capital
Even after restrictions are lifted, Lloyds incoming chief executive Charlie Nunn must calibrate shareholder returns to the British public mood, as well as to capacity.
He will replace António Horta-Osório, who rebuilt a lender damaged by the financial crisis. Horta-Osório’s emphasis on the public service obligation of banks pacified an angry mob. Since the coronavirus pandemic broke out, many big consumer-facing businesses have sung from the same song sheet.
Lloyds’ profits and revenues
Expect Lloyds to whittle down surplus capital with diplomatic gradualism. Automation, less controversially, should also feature as a destination. No one is pilloried as a profiteer for buying computers.
The Lex team is interested in hearing more from readers. What’s your analysis of Lloyds? Please tell us what you think in the comments section below.
From todays Times ......not the full article as you have to be a subscriber .......
Banks set to defy gloom and restart dividends
Britain’s biggest publicly listed banks are set to shrug off falling profits to announce a resumption of dividend payments of about £5 billion after a year’s pause. Progress on vaccines and hopes that interest rate margins may start to widen have modestly improved sentiment among bank executives, despite them building an arsenal of...
GREEN LIGHT
Regulator allows UK banks to restart dividends
Prudential Regulation Authority has set out guidelines for how much they can pay
The PRA, which is part of the Bank of England, has given the green light to dividends © Bloomberg
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Matthew Vincent and Owen Walker 31 minutes ago
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The UK banking regulator has given lenders the green light to resume their dividend payments, nine months after it asked them to suspend shareholder payouts and preserve capital at the height of the coronavirus pandemic.
In an announcement on Thursday, the Bank of England’s Prudential Regulation Authority said its latest test of banks’ capital positions had found they were resilient to “a wide range of economic outcomes, including economic scenarios that are materially more severe than current central expectations.”
As a result, it has concluded that there is now scope for banks to recommence distributions to shareholders if they wish “within an appropriately prudent framework.”
However, the PRA did put in place guidelines for how much the banks should be paying out.
“The PRA will expect to be satisfied that any distributions would not create excess vulnerabilities to stress for a given bank or impede its ability or willingness to support households and businesses,” it said.
In late March, the PRA had requested that banks suspend dividends and share buybacks until the end of 2020, and cancel any unpaid 2019 distributions, to prevent depletion of their capital at time when lending was needed to support the economy. They were also asked to restrict cash bonus payments to senior staff.
The UK’s five largest banks initially resisted pressure from the BoE to halt their dividends voluntarily, but eventually announced they were cancelling dividends worth £7.5bn so they could “serve the needs of businesses and households”.
UK bank share prices have been hit hard this year. Barclays is down 22 per cent, while HSBC has fallen 32 per cent, Lloyds is down 44 per cent, Standard Chartered has dropped 34 per cent and NatWest has fallen 34 per cent.
" in a perfect world the government would sell its shares and put the money back into the treasury but clearly that wont happen south of 80p "
The government don't have any shares in Lloyds ...your time machine dashboard is displaying the wrong year
Cheers
Brighty1 , RBS was a basket case , drastic action was taken in very difficult circumstances , Lloyds is a very different prospect in very different times
Any CEO worth his salt will tell you that the share price should be grown organically . AHO also said this a good while back .....
Any Consolidation for Lloyds would be an admittance of failure by Management to grow the share price .