FINANCIALS: Lloyds: Results 25-Jul, Peer Indications Mixed

Lloyds (LLOYDS: A3/BBB+/A) results are 25-Jul. Sabadell results appear supportive but Santander a little less so. Much as earnings estimates have been cut, the macro outlook remains relatively benign and spreads have barely moved, in relative terms (though the equity has outperformed).

• Results last time (24-Apr) were broadly in line with only a model-driven beat on loan losses to really catch the eye (pushing pre-tax ahead of expectations). Margin guidance was read by some as marginally better than expected.
• Mgmt held an investor day in June covering the business & commercial bank, aiming to highlight this higher-returning arm of the bank. Sabadell results (today) were indicative of positive mortgage volumes and margins in the UK, which is helpful. Comments from mgmt at industry events in the period have been broadly positive but other newsflow has been relatively limited. There has been no update on the FCA Motor Finance Review since the judicial review (started on 3-Apr) which the FCA indicating more info by 24-Sep-24.
• Spreads have tightened 4bp more than €IG banks since last results but the equity has outperformed by nearly 11pp over the same period, perhaps on the lack of negatives.
• Revenue estimates have been trimmed (by <1%) since results but EPS has come down around 6% which looks rather pessimistic on the basis of recent economic (and peer) data.

Results are due at 0700 (London time) with conf call at 0930 at: https://web.lumiconnect.com/#/m/124449303