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Lloyds Banking Group PLC LLOY Stock Quote

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Morningstar‘s Stock Analysis LLOY

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Is it the right time to buy or sell?

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Tailwinds Outweigh Headwinds at Lloyds; We Maintain Our FVE Despite Surge in Provisions

Niklas Kammer, CFA Equity Analyst

Analyst Note

| Niklas Kammer, CFA |

Narrow-moat Lloyds reported third-quarter underlying profits of GBP 1,729 million, down 17% compared with the same period a year ago. The decline was driven entirely by higher loan-loss provisions of GBP 668 million versus a reversal booked last year of GBP 119 million. Excluding these provisions, performance was good overall, with income generation up 13% outpacing operating expense growth of 9%. Despite growing uncertainty around the U.K economy, tailwinds in the form of higher interest rates are outweighing headwinds for Lloyds. This is in line with our thesis for Lloyds, which we expect to disproportionately benefit from the higher rate environment compared with the strain expected from a weakening economy. We maintain our fair value estimate of GBX 77 per share.

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Key Statistics LLOY

Company Profile LLOY

Business Description

Lloyds is a retail and commercial bank headquartered in the United Kingdom. The bank operates via three business segments: retail, commercial banking, and insurance and wealth. In retail, Lloyds offers primarily mortgages (66% of loan portfolio), credit cards, and current accounts to its customers. Its commercial banking operation provides lending, transaction banking, working capital management, and debt capital market services to large corporates and financial institutions in the U.K. Insurance and wealth rounds out the product lineup with life and property insurance as well as pension solutions and high-net-worth asset-management services.

25 Gresham Street
London, EC2V 7HN, United Kingdom
T +44 2073562104
Industry Banks - Regional
Most Recent Earnings Sep 30, 2022
Fiscal Year End Dec 31, 2022
Employees 57,955

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