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Thanks for these posts. Am a relatively new TORO investor and have also built an international portfolio of similar sector shares so it is good to hear your perspectives. I would add that at this macro-economic situation (inflation, rate movements, war, weak western leadership) it is probably important to hyper-monitor the credit markets behaviour and look for special updates from these companies on this.
Mot, I understand your sentiment. As a lloyds sceptic and also previous MD there (meaning I own quite a lot of shares) even I am surprised about the feckless announcement. However, today was obviously the worst day to announce. Let's wait to apply judgement until we have a normal market. LBG still has unbelievable cash generating capability (their balance sheet increased) and they seem to focus on fee income as well now (a big change since I was there a few years ago). While the top levels of management are not very good but it is early days for the new CEO. I hope shareholders will push them. I may travel to the UK for the shareholder meeting. I know today was a damp squid day but I think we should have faith (again)...
Given the West's reaction to the invasions of Georgia and Crimea for me it is hard to see there will be any medium term impact on the markets. Short term perhaps. This is because I don't believe the West has the Ba**s to opposite Russia in any substantial or meaningful way. I mean, it is only a few years since the previous invasions and Western Europe, led by Germany, kept building dependency on Russia. They were VERY upset when Trump demanded that they would pay the 2pct to NATO as agreed decades ago. Germany has even started using coal again... So all in all, it looks like Obama's red line in Syria. Meaningless.
Western Europe is already facing an energy crises due to idiot decisions in Berlin, London and DC and it cannot afford to cut off Russia in the middle of the winter...
Perhaps NASDAQ...?
It feels like HFEL is suffering a bit from the uncertainties from the Chinese property debacle and the associated fixed income instruments. I am "underweight" this stock and will not add until more certainty can be had. But I will not sell.
If you own other high yielding credit plays, like me, it is probably a good idea, in the light of higher interest rates, to really dig into their holdings.
Many thanks for this Genghis!
Henry,
I bungled my invite for today's presentation. If you are listening would you please give your impression of the call later?
Best regards!
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.
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!