Free Trial

FINANCIALS: LLOYDS: Conf Call Reinforces Our Supportive View

FINANCIALS

Lloyds (LLOYDS: A3/BBB+/A) conf call focused largely on margin and asset quality. The message on both was positive, in our view, with headroom beyond current guidance. LLOYDS spreads are streaming wider with the index today, but we see these results as supportive.

  • Net interest margin: narrative guidance here is that NII, and then NIM, will turn to growth in 2H24 and the year will end with a positive margin trajectory as the hedge impact grows. Effectively, the sell-side was asking why guidance wasn’t being upgraded and our sense was that it’s simply conservatism. Helpful and a positive indicator for NWIDE, YBS, NWG and, less so, BACR.
  • Asset quality: guidance here was as positive as we read it. Yes, model changes reflect a more benign UK outlook are a major driver but mgmt comments were that forward indicators were looking more positive than even three months earlier. A further positive for the above issuers.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.