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Lloyds Banking Group PLC LLOY

Morningstar Rating
GBX 46.57 0.01 (0.01%)
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Company Report

Lloyds Earnings: Overall Within Expectations; 2024 Net Interest Margin Looks Achievable

Lloyds reported fourth-quarter 2023 results in line with expectations. Net income decreased to GBP 4.232 billion on an underlying basis from GBP 4.514 billion last quarter, while operating expenses increased to GBP 2.486 billion from GBP 2.241 billion. Net interest income declined 4% on a lower banking net interest margin of 298 basis points (308 basis points last quarter), driven by deposit and mortgage margin pressure. Positively, the shift in deposits is showing signs of slowing, similar to what U.K. peers have posted this earnings season. A GBP 450 million remediation charge Lloyds took after a Financial Conduct Authority review into potential motor financing mis-selling was unexpected. The bank highlighted that it still sees material uncertainty around the actual remediation necessary in this matter, if any. We maintain our fair value estimate of GBX 77 per share and narrow moat rating.

Price vs Fair Value

LLOY is trading at a 40% discount.
Price
GBX 46.57
Fair Value
GBX 92.00
Uncertainty
Medium
1-Star Price
GBX 878.21
5-Star Price
GBX 78.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The bank’s business model is well-positioned for the challenges that the current economic outlook poses.

Bears

Its heavy reliance on net interest income makes Lloyds' performance more susceptible to interest-rate changes.

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News

Trading Information

Previous Close Price
GBX 46.58
Day Range
GBX 46.5447.51
52-Week Range
GBX 39.4252.89
Bid/Ask
GBX 42.40 / GBX 47.25
Market Cap
GBX 2.98 Tril
Volume/Avg
467.4 Mil / 173.4 Mil

Key Statistics

Price/Earnings (Normalized)
5.87
Price/Sales
1.59
Dividend Yield (Trailing)
5.41%
Dividend Yield (Forward)
5.41%
Total Yield
11.81%

Company Profile

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.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Value
Total Number of Employees
62,569

Competitors

Valuation

Metric
LLOY
BCS
NWG
Price/Earnings (Normalized)
5.874.864.12
Price/Book Value
0.630.440.63
Price/Sales
1.591.071.48
Price/Cash Flow
2.771.303.13
Price/Earnings
LLOY
BCS
NWG

Financial Strength

Metric
LLOY
BCS
NWG
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
LLOY
BCS
NWG
Return on Assets (Normalized)
0.92%0.43%2.03%
Return on Equity (Normalized)
17.84%11.80%44.23%
Return on Invested Capital (Normalized)
Return on Assets
LLOY
BCS
NWG
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Banks - Regional Industry Comparables

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Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
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BNP Paribas ADRGzyk$69.0 Bil
USB
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ITUB
Itau Unibanco Holding SA ADRSvvn$64.3 Bil
PNC
PNC Financial Services Group IncRxzfqr$58.6 Bil
ISNPY
Intesa Sanpaolo ADRVfbn$58.4 Bil
MFG
Mizuho Financial Group Inc ADRNmty$47.1 Bil
TFC
Truist Financial CorpBcvpg$46.7 Bil
LYG
Lloyds Banking Group PLC ADRZqpkfx$37.8 Bil
BBD
Bank Bradesco SA ADRMjb$28.5 Bil
DB
Deutsche Bank AGSggqy$27.0 Bil

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