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I don't see any "transformation " of Lloyds Business model at all. They are stuck in the UK with expansion preventative market shares in retail. They are getting into the Landlord business which will further concentrate risks. Their Private Bank has had lots of potential which was never harvested and at this stage they neither have the people or the processes in place too expand it. I have been a client for 20 years and they are lovely people but even now when I have 100K sitting there they can t even offer me a term deposit because I live abroad... I worked in the commercial bank for 5 years on an MD level. They have pathetic market shares with Mid Market and SME clients but has no interest in expanding it. They messed up MiFid and now have a massive cost problem as they don t have the scale. RBS, Barclays and HSBC is way ahead of them. To fix all these issues requires a complete while out of the top 2 level of management which is not going to happen and besides they are too busy with woke ideology.
There are only 2 reasons why the stock is undervalued: the balance sheet has massive cash generating capabilities which is not in the price. Nor is a likely big increase in dividends. These are good reasons to own the share but I don t there is any rational reason to believe in a successful transformation of the business model.

The Fool and Yahoo finance?? Just saying...

Since successfully turning LBG around and privatising the bank, AHO did nothing to write home about...
A terrible typical old school top down manager. Think his future is board memberships, not executive/Chairman roles. To some degree the CS job revealed who he really is. At LBG we all saw it, but it was not public.

At LBG AHO was like a King, well above the peasants never to visit any of the businesses enjoying his bodyguards and executive BMW's. At CS he went full emperor taking all the fruits of a Chairman. Didn't t go down well here in discreet low key Switzerland. The type of Leader you read about pre-Peter Drucker era.

My partner works for CS and I worked as MD with Lloyds for 5 years. AHO is a terrible self-centric autocratic leader. At Lloyds everybody feared him and told him what they thought he would like to hear. I don't take away from him his success with getting LBG back on the feet and re-privatise the Bank, but since then LBG did nothing monumental and the share price did nothing. Here in Switzerland AHO's adventures were highly scrutinized and he was "competing" with the CEO. I believed AHO would win out, as he is sharp and ruthless, but the small Swiss finance community won out. Longer term I think both LBG and CS will be better off without him.

https://www.bloomberg.com/news/articles/2022-01-16/disappointing-decade-for-european-bank-stocks-gives-way-to-rally?sref=TUq649FF

Thanks for posting this! As an international investor it is impossible to find all relevant articles self. Cheeers

It's all about interest rates/inflation and earnings now (unless sudden armed conflict).

Looking good finally. Some big buyers over the last few days. Rates looks like going higher. Need good F/Y results and juicy dividend.

Many thanks for this post. As I have said many times before, LBG's balance sheet is amazingly effective in generating positive cash flows under normal circumstances (I worked there). The problem is the fee revenue. It is minimal and they have removed fee generating products and services as well as the people that generate it. So, while shareholders look forward to the strategy day, a key question to keep in mind is how will fees grow given their present strategy ands culture?

Question from abroad: Does the UK regulator still weigh in on dividend policy??

Small volumes all day. But a sale of almost 7MM shares happened at 12.35 at 47.41. Your guess is as good as mine.

It is comforting to see that both Nunn and Chalmers increase their holdings of LBG!
BUT why David Oldfield ( CEO of the Commercial Bank) I still employed is surely a puzzle. I was there as part of the" top team" when David replaced Andrew Bester as CEO of the Commercial Bank (CB), Oldfield's appearance was a disaster. Bester had rebuilt CB with a purpose and mission that made sense focusing on client service and shareholder returns. Oldfield came in
reversing it all focusing on crude profits (which is not sustainable). Senior relationship managers communicated that Oldfield had neither interest in seeing clients nor colleagues in departments. This would explain why AHO appointed him as he was equally not interested in the same.
It is time for the new CEO of Lloyds to clean out the client hostile top management of LBG and replace it with modern managers that appreciate clients AND shareholders.
Lloyds has a wonderful balance sheet BUT to build a Bank that builds future profits they have to clean out the top 1-2 levels of management replacing it with proper professionals!

It's a "falling knife" stock. European Bank index goes up, LBG goes up less than index. Index goes down, LBG falls more.
Objectively this is an undervalued share compared to both assets and future cash flow. Some is perhaps explained by lack of clarity of the dividend strategy which may be classified the next few months. BUT the company has a massive lack of experienced and proven managers at several top layers of the company following years of AHO's autocratic and micromanaging leadership style (check out his latest scandal at Credit Suisse). Politics and pleasing AHO was everything plus intense focus on "diversity". The new CEO is also unproven and far to inexperienced to run a balance sheet as large as LBG. Best way forward at this stage is to sell everything that is not UK retail and mortgages. Whatever "growth strategy" they may come up with there is nobody there who can implement. I do not understand why institutional shareholders do not revolt?

Have also added the last couple of weeks. One has to be patient with the low liquidity....

Left wing authoritarianism spreading fast all over the West.
You must think right, speak right, eat right, medicate right, stay home when told, not travel when told.
The Chinese don t need to invade, the west conforms to CCP's norms by itself. The white flag is on its way to the top of the pole.

As potentially positive it is to hear "expansion" from Lloyds after a decade of cutting and consolidation, with parallel development in the long suffering share price, I remain sceptical about these plans:
- Becoming a landlord is putting more eggs in the same UK basket with potentially more problems than benefits. Lloyds is already the biggest mortgage provider...
- Expanding the Private Bank business. I have been a client of Lloyds private bank for 20 years as well having worked as an MD for the commercial bank and there was never any appetite to build new products/services or sell anything else than current/savings accounts and loans. The private bank employs lovely people but it is a lost cause. Now, when living abroad, they can t even offer me a term deposit...
- Investment Bank? Lloyds do not have an investment bank, they have a commercial bank which, apart from a few years of excellent leadership by a previous manager who was forced out by AHO, has been cut cut and cut. They are number 3 in the SME segment and 4 in Mid Market and do not have the scale or the ambition to build market share.
- US. The US proposition has always been a bit of a joke.

In conclusion, as relatively big share holder I wish them all the luck. BUT, the culture in the company is so corrupted by internally focused "government style leaders", social justice metrics and extreme focus on lending, lending and more lending. For a large company to change focus to develop fee based services requires such major changes it is unrealistic.
Better to sell off the commercial and private banks and focus exclusively on UK mortgages and basic retail banking.

AHO was a authoritarian micromanager who spent 99pct of his time in his office penthouse with security and 750I's waiting below. He did stabilise the company and returned the bank to private hands but should have left after that. He never built private banking or commercial banking and the share price was a disaster during his tenure. Now he is doing the same crap at CS...

This was my impression working 6 years with LBG. They do not care about the shareholders but only for misguided "social justice" metrics (read fire straight white men, preferably over 50), internal fake presentations with no visible financial or qualitative benefit for the company or its customers and UK societal issues that they perceive as virtue. When a bank starts planting trees you know they have lost the plot... Shareholder accountability Zero. Now, as AHO chairs Credit Suisse, we see the same crap there (my partner works there). Everything woke goes to sh**t.

Many thanks! I need to start following other REITs too. Cheeers,