Lloyds Is a UK Pure Play With a Strong Structural Hedge Tailwind

Lloyds is a UK banking pure play, with nearly all of its assets based domestically. The bank operates a strong retail franchise, resulting in a market-leading low-cost deposit base. Its focus on mortgages, credit cards, and motor finance drives a high reliance on interest income and developments of base rates and swap rates in the UK. That said, Lloyds is building its fee-based income streams through its insurance and pension offerings and putting more weight behind its transaction banking solutions in its corporate banking segment.