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Lloyds is perpetually lagging other bank stocks because 1. Poor dividend. 2. Topped out UK retail market share (both mortgage and current accounts) in a strategy that is only UK. 3. Covid related risks in mortgages and credit cards. 4. The areas where significant potential exists such as Private Banking and Commercial Banking are not being harvested due to constrained strategy and investment in combination with seriously poor management. The Company has incredible cash generating capabilities but unless dividends are restored there is hardly any reason to be optimistic about Lloyds positively correlating with Bank indexes.
normally higher highs is an indication of an upward trend....
It's a good observation. I've been a client of the nice but incompetent Private Bank for about 20 years and while they are happy to lend you money they have no products (literally) nor do they have any investment expertise. It's quite remarkable. But they are very nice people. It would make more sense to sell whatever remains of the PB and have lending agreements with whoever buys it.
I agree the cash generating capability of LBG is very impressive which I guess is not fully reflected in the share price. But the strategy, if maintained, provides no further upside due to maxed out market shares in retail, consumer finance and insurance. The areas where there is still upside (wealth management and corporate banking) remains elusive. I have been a client of Lloyds Private Banking for 20 years and they are nice people who will lend you money but they have no products, no systems and extremely poor management. I worked in the commercial Banking division in a fairly senior position for more than five years and AHO totally gutted the best managers, took away most products and never supported a strategy that would harvest market share advances in SME and mid market corporates. All they want to do is to lend money, cut costs and play gender politics when they don't play office politics.
I agree with Wenglishboy. I was ok with AHO getting the state its money back and stabilising the ship when he started. But his strategy since has been abysmal with too much concentration of risk to UK consumers and a systemic destruction of the Commercial Bank which is plagued by extremely poor management. There is nobody in the CB management team that have a track record of success and they never were able to move market share north in SME and mid Market segments. They might as well get rid of the commercial bank as well as the Private Bank and refocus as a pure UK retail bank. Then perhaps someone will buy them. The last 5 years Lloyds has been an AHO piggybank where he has passively and autocratically ruled. I was there in a middle management role and never saw him break a sweat nor motivate anybody to perform. Everybody was scared of him. The culture was internal, anti-client, political and focused on gender and race. Not clients or share holders. There is no reason to believe that this share will perform better than any European Bank index.
There is nothing Devine about AHO apart from perhaps in his own arrogant narcissistic mind. So while he deserves kudos for getting the Government its money back and restoring some dividends after that, his strategy for the company, especially in the light of Brexit, was a disaster. The share price is lower than when he took over and he has subjected the company to a highly risky UK centric strategy. He could next expand the retail business, just cut cost. He originally hired a great head of the Commercial Bank but didn't given him full support so he left. Their market share in the critical SME and Mid Market segment never expanded (they are 3/4 out of 4 UK Banks) and they built an expensive and cumbersome response to MiFid. Insurance never went anywhere. So what are investors buying if not a proxy for the health of the UK. Very risky strategy indeed. In the meantime the culture of the company is not focused on performance, just costs and gender politics. There is a slight hope that a bigger bank might buy them but there is absolutely no reason to believe that this stock will outperform any European Banking Index. God riddance to AHO and his arrogant lofty aristocratic leadership, his body guards and his fleet of German limos outside the head office. To Credit Suisse share holders, you know what's coming...
Forgot to say that since AHO is joining Credit Suisse, another horrible stock, it may be time to sell that one too.
Given that this stock trended between 50 and 60 all of 2019 during favourable conditions and good dividends it is hard to see how this long term underperforming stock has much upside at all. So while 50 may be achievable the next couple of years it is now difficult to look at Lloyds as a growth stock or even a safe dividend stock. They cannot increase marketshare in Retail, they destroyed the Commercial Division and never managed to build out SME and Mid Markets and never did anything with the Private Bank. The share is much lower than when AHO took over in 2013 and the UK centric Brexit hostile strategy they adopted (against all logic) makes long term growth impossible. Sure, a new CEO and Chairman comes in but this stock is nothing better than a short term punt on UK recovery. Which obviously may be good enough for now.
HAHA, 100pct fake news but clever (but pointless) positioning from AOC. Sen Cruz is one of the most intellectual and knowledgeable members of the Senate. AOC however, is ignorant, but great at self-marketing. The bigger Joke of course is that the "establishment"thinks the Paris agreement is somehow any good for the climate when it allows China and India to pollute while imposing costs on the Western world as US is one of the biggest reducers of greenhouse gases the last few years. Even the idiots at the UN admits so in their most recent 2021 report. Reality is of course that the US will as always innovate the world out of the climate problem and not UN, EU, the Paris agreement or other hapless government initiatives.
Hello, I have not been following this blog during C19 so sorry if I have missed this information:
Are there any news from Lloyds about resuming dividends in 2021?? Thanks!
Many thanks!
Tell me about it - as an ex employee with quite a bit of deferred compensation in shares that I can't sell its awful. The dividend was the only positive. Thanks for replying! I think better buying large US Banks as they usually recover faster and will make money from volatility in commodities, bonds, shares and FX all of which Lloyds has very very little.
Am I right in saying this means no dividend payment for year 2020 and no final dividend payment from 2019?
My only reason to be on this blog is my interest in Lloyds Bank, I have no view wether UK should be in or out of EU. If you guys know something about how Brexit that will benefit Lloyds I would be really interested to hear it as I think the market has missed it for the last three years!
Sorry not to be clear. What I meant was that within the dire constraints of a UK only strategy for a bank that has maxed out its market share in Retail, AHO explained in Davos yesterday that an area of growth for LBG in the UK is pensions/wealth. While this obviously true and they have indeed the partnership with Schroders (with the aim to be "a top UK financial planning business within five years), I tried to express my doubts about their ability to succeed in such a material way that it will have a profound impact on the bottom line(within a reasonable period of time). While Schroders is a credible pick, the distribution platforms such as Halifax Share Dealing Service and Lloyds Private Bank are very weak and poorly set up to service individuals with significant savings. Their market share in anything else than Retail and perhaps "mass affluent" segments is notoriously low. So while they may be able to bring some relevant products and value to the existing millions of retail clients, they are unlikely to make any market share gains in the battle for the "high net worth" and "ultra high net worth" segments where the competition is fierce from a vast array of international and established players.
Yes, it has been an impressive turn-around by UK Bank standards! Successful implementation of post-crises consolidation strategy of selling HBOS wild global assets, focusing on increased returns and digitising the consumer bank. But the financial crises was more than a decade ago and the strategy of focusing exclusively on the UK has run out of relevance as it can not provide sustainable growth. Despite knowing that Brexit would be bad for the Bank, the chairman advocated it and instead of building a strategy that hedged the Brexit risk for the share holders they still sing the same old song. They have kept the shareholders hostage to Brexit the last three years and aligned the value of the company to what is going on in the Parliament. A terrible thing to do especially if you want to come across as a stable high returning stock and avoid speculation in the stock. Besides, on Bloomberg TV this morning AHO (Davos) could not explain how shareholders would see growth out of this single country. Pensions and financial advice he suggested but we all know they are not set up for that neither on the product or distribution side(they don t have the right clients nor private bankers). Their long suffering corporate bank cannot compete against RBC, Barclays and HSBC with the present set-up of managers who only focus on cutting costs. Yes, perhaps the stock will go up if there is a decent deal with EU but what happens if there is not and if there are more "accidents" forcing them to cut the dividend? Hard to see any upside on this stock given all this.
Think this is just business as usual i.e. part of long term program of cost cutting and consolidation.