The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Assuming your faith in Lloyds is still strong, why not average down? Personally I think the long term outlook is pretty strong, once we get over the Corona impact this year. The bank is very prudent now, meaning the board might book a further big provision at half year at the end of July. That could impact the share price, short term. Although they might report the current provision is adequate. I see all the mortgage holidays as issuing loads of new £2000 loans. New business lending was backed 100% by the government even fees. Deposits are apparently high as well during the lockdown period. We are over PPI, some would say if those policies were still being sold, the bank might have loads of claims, is that a win? I dont think low interest rates as an issue, the bank still adds their spread whatever the rate is. House sales picking up strongly, still huge desire to move. House builders back building again. I see positives now in a rising market. I'm in for 80,000 shares longterm, not selling. Averaged down to 34.5p now, so almost in the black.
Well sure, I bought in at 45p to claim last years div, then a week later it went to 33p so bought more. Hey ho. I'm a returning shareholder, I got out 10 years ago, had enough. Although things are different now. It's taken 10 years to fix the HBOS nightmare. Antonio went ill remember when he first took the job due to the billions of shocking levels of risk (100's of billions I hear). Capital is now sorted, risk is massively reduced. PPI is almost over. We are about to enter the golden years again, just as the virus hits. In some ways it's a blessing buying the bank on the cheap, just as it's about to turn good again. Maybe I'll be proved wrong,but I'm looking at 2021 and 2022 with buy backs as the time to enjoy the investment.
Exactly. If the bank fails, it means the entire country is broke. All i hear is positives actually. More people trying the Lloyds banking App and liking it. More people fleeing the smaller banks for the big banks during the crisis. More people holding their salaries in cash at the bank (not spending) getting next to nothing interest remember. Great for capital right. More people using Lloyd's wealth business. Damn I've done 10 trades using sharedealing service myself. Hardly any claims on PPI for unemployment now, which might have been tons worse, if those policies were actively used. Most loans guaranteed by the gov, with probably any existing loans built into new low risk loans if they wanted more funding. Lloyd's lending mortgages with high LTV, shifting to low risk last 5+ years. I honestly struggle to understand the share price.
What is the point banging on about a 2.25p div. When the share price is now 30p not 60p. Booking a huge provision in the first quarter is the banks way if saying. "We're not happy about that div, we're book a provision in advance before it 'might' hit" and reduce our tax bill. "Win-win". Assuming the bank is sitting on the cash, we will get it back in 2020. No boss is going to fight with the BoE or the regulator during a crisis. The bank has clever people, this year is about playing the strategy game. Besides assuming you back the bank, we're looking at potential 14%+ annual return at PPI trading condition next year (on any shares you buy now). We know the worse case of PPI is now over. Then I hear of huge demand on mortgages right now and wealth side of the business. People are sitting on piles of cash, no lunch time sarnies, train fares, coffees or trips out for months. You've got a massive opportunity in this crash, but you're focusing on the div rather that loading up with more shares. Strange. Woykx you rather pay 60p and get your 2.25p div?
I see those 1000's of mortgages holidays akin to granting 1000's of "new" small loans. It's likely too that banks switched existing loans into new gov backed guaranteed loans for businesses when they needed new funding. From a revenue point of view, I see this as a big positive. Not to mention maybe people on furlough where still being paid.
They question to ask everyday is "are things getting better or worse?" It would appear we're now in getting better territory. So i foresee upside now, at least this week.
Hi folks, first post.
I think we need to take into consideration, that although output (GDP) might be low, many are still being paid via the Government. So measuring GDP as an indication of financial distress, is not as bad as some might expect.
I'm still pretty confident that Lloyds will get through this. They are using 2019 final div, plus 2020 potential divs. What's that around £12bn. Add to that strong capital and assets worth well over 50p per share. We are in the 2nd phase of returning to work.
I'm struggling to see the future downside at current share price.