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28 Oct 2015
Shares in Lloyds Banking Group (LLOY) opened 4.5% lower this morning after an earnings update that, while financially positive in terms of profits, growth and recovery, was light in terms of consensus. What looks like weighing even more is the ugly mug of PPI provisions which is refusing to duck below the parapet. While markets recently got excited at the prospect of an end to this considerable sector bugbear, remember that the deadline for claims remains 2 years away.
Still, at 74p LLOY surely remains the pick of the UK retail banks in terms of recovery potential, dividend yield and the general fuss being made about the Government offloading the British taxpayer’s remaining stake (…to the British taxpayer), while today’s 4% discount makes the stock potentially even more attractive to pick up right now, ahead of next March’s much talked about share offer.
Augustin Eden, Research Analyst
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