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Hilarious!
Pointless appointment. The Markets business at LBG has been cut to the bare and probably rightly so as they only have UK centric clients in the commercial bank. Lloyds is about lending lending lending, not fee business.
I am also an optimist by nature but unless there is a massive up on the dividend in combination with a new growth strategy I continue to see the stock underperform the industry. I think an increase in the dividend is likely but a new growth strategy is highly unlikely as it will require a move away from the UK centric strategy. Cost cutting and increased dividend is the game.
My main problem with LBG is their "government style" culture (i.e. not focusing on results) and their obsession with woke metrics. The new CEO's video is telling. It's helpful to know that he can oil a bicycle chain but it's not really helpful in his job. It may even be an obstacle.
EarlHaig, I worked at Lloyds 2012-2018 in a top 1pct position. Top management gets well very paid but not the rest so from that perspective you are right. Nobody can predict what will happen so the question is really if Lloyds can outperform European/Global Bank indexes. In my view not a chance. Market share in retail deposits and mortgages is maxed out. Now they are getting into real estate investment and rental business. Too much risk concentration. Credit cards is soon maxed out. Low quality insurance and asset management. The Private Bank has been on stilts for 2 decades (nice guys but no products). AHO killed the Commercial bank which are way behind RBS, Barclays and HSBC in terms of market share in mid market and SME business. There is no Global Corporate business that can grow given the geographic limitation in their strategy. And in terms if financial institutions yes they make some money but it is correspondence banking which cannot really be grown. Finally, the culture is awful. It's like working for the Government with massive meetings full with people with accountability. Even if they had a new exciting growth strategy (it had to be international!) their ability to execute is very limited. Besides the last 5-6 years they have been more interested in fulfilling "diversity quotas" than promoting competent people who can deliver. The only thing that could safe the stock, in my view, is to restore a massive dividend. The balance sheet is impressive and can generate a huge return as they cut costs. Cheeers
https://uk.finance.yahoo.com/news/sell-dog-funds-run-lloyds-101914014.html?.tsrc=applewf
In my view a very unimaginative move by Lloyds which perhaps indicates they are going to stick with the 95% UK exposure.
They are "doubling down" on UK real estate. The risk of holding the stock has just gone up with questionable future returns.
In the meantime, under AHO, they did NOTHING with their underinvested private bank and they cleaned out and dumbed down the commercial bank (in which they have limited market share in SME and Mid Market). They are out of asset management, a limited insurance business and while they have built market share in Credit Cards the picture is not the leading UK Bank.
One has to wait for the new CEO's strategy statement whenever that is going to come but this investment relies on belief in the UK as an economy and belief that they can resume an attractive dividend. I worked there for six years. It's like working in Government....
Both of you many thanks! It is my intention to buy and hold as part of a portfolio of high yielders in credit. Price action of yesterday really makes your comments come alive . I will try to follow a systematic strategy by buying small amounts regularly until I have reached my (unscientific) allocation. Thanks again. Best regards!
I am now in for modest amount. Will build from here. Many thanks!
Thanks for this! Well, to clarify, my intention is to build a position for the long term. I tried orders for 5K and 10K shares at "reasonable" limits (in the middle of the big spread) but got nothing done. I wonder if the liquidity improves when the US comes in.... I will report back later in the week. Thanks again.
I have recently placed some buy orders for VSL but find the liquidity extremely tight. Does anybody want to share some insights into their experiences trading this share?? Thanks!
It should surely has been deposited into your brokerage account?? If not ask them.
I don't expect LBG to be a take-over target. Too big and too difficult to integrate in a European or global strategy. The best we can hope for is a return to stable high dividends and no new disasters. The commercial bank has been tamed down and is really only doing loans and some (expensive) payments and the Private Bank will never get fixed as long as Lorenzo runs it with Insurance. Ive banked with the private bank for about 20 years and they are very nice but have no products. Retail business and continued cost cutting may lead to a higher share price via dividends over time. I would not expect bank index beating share price however. It's not a revenue or product development hungry culture and they really have focused away from meritocracy via endless "diversity programs" with metrics to be achieved by every manager. There is upside but one has to be very patient. UNLESS there is a change of strategy.....
Having worked at LBG for 6 years as an MD "excessive" compensation is not an issue a shareholder need to worry about. Competence however is...
I have been a client of Lloyds Private Bank for about 20 years. Very nice people and great at lending money to people!
BUT there is nothing that fills me with any confidence that they will be able to grow the Wealth business. They have no products and even if they did they have no systems, culture or competence in place to be able to identify opportunities with clients and harvest the gold mine they have been passively sitting on for decades.
This purchase appears totally random as they have no strategy where this unit will fit into. The only reason, for now, to own LBG is for the future potential dividend coming from the massive cash generating capability of the balance sheet. I.e. Lending to British clients and taking deposits from British clients. Not a bad business but to believe there is a top line growth story here is probably an illusion. They would be better off selling/closing the commercial bank, the wealth and insurance unit and focus exclusively on mortgages and deposits.
More a general dollar weakness due to crap employment/unemployment numbers on Friday.
I agree with the more positive sentiment for LBG as UK real estate is rising, the economy improves due to vaccines and the general outlook for Lloyds is improving with better dividends and the departure of the ghastly duo of Chairman & CEO. Ultimately the benefits of leaving the EU will materialise despite a politically unreliable Government.
At the moment two significant macro risks hang over the markets; 1. Very stretched valuations for stocks 2. Much bigger risk for military conflict due to Bumbling Woke Biden with Russia, China and Iran actively advancing their aggressions.
Massive changes to come at CS. The problem is that I am not sure AHO is the right dude for the job. CS domestic retail is a small part and all the other areas such as Private Banking, Investment Banking and Markets are area AHO either killed at LBG or has never dealt with. I still bought some shares at CHF 10.70 last week.......
Well... The gentlemen's club has spoken. Sir Win Bischoff is the chairman who can be credited with Lloyds turnaround.
Since Blackwell took over the share prices has done nothing else than tank.
Especially egregious in his unsuccessful tenor at LBG was when, despite internal analysis of how bad Brexit would be for LBG, Blackwell promoted Brexit publicly. That, in my view, was an unacceptable and hypocritical betrayal of staff and shareholders.
He had two choices: 1. Resign as an honourable gentleman to give clarity to shareholders to promote his cause freely. A cause I agree with. 2. Re-design the strategy to be less vulnerable to the negative consequences. He did neither and as such share price, profitability and dividends went south. A disgraceful tenor as LBG chairman.
Thanks for this article. Perhaps the article is best reading for an investor in Credit Suisse as a heads-up for what's coming there.
AHO's comment about diversification is pertinent as CS has little scar in anything apart from domestic retail banking/wealth management. The puzzling part to me is why AHO was chosen by CS. CS's retail banking is already well digitalised and AHO has limited experience / success from Wealth Management, Investment Banking and even Corporate Banking.
Tom8080 is 100 pct right! Lloyds reduced return targets when Andrew Bester left the Commercial Bank so now it would be prudent to hand capital back to share holders. With the existing highly restrictive strategy in terms of target market, geography and product range, Lloyds can not grow significantly or increase returns. Efficiency is the only way forward and that can be done with much less Capital.