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Lloyds Banking Group PLC ADR LYG

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Morningstar’s Analysis

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Economic Moat

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Capital Allocation

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Lloyds Remained Profitable In 2020 Despite Rates and Loan Losses; Fair Value Estimate Maintained

Niklas Kammer, CFA Equity Analyst

Analyst Note

| Niklas Kammer, CFA |

Narrow-moat Lloyds Banking Group reported a 71% drop in its underlying profit before taxes to GBP 2.2. billion as lower income and a spike in loan-loss provisions have taken its toll in 2020. However, the fourth quarter was decent as Lloyds showed a flat trading surplus on a sequential basis. We maintain our fair value estimate of GBX 62 per share.

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Company Profile

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.

Contact
25 Gresham Street
London, EC2V 7HN, United Kingdom
T +44 2073562104
Sector Financial Services
Industry Banks - Regional
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type
Employees 61,576

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