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Beaufort Securities Breakfast Alert : Lloyds Banking Group

Published: 11:22 23 Feb 2018 GMT

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Markets


Europe
The FTSE-100 finished yesterday's session 0.40% lower at 7,252.39, whilst the FTSE AIM All-Share index was down 0.33% at 1,040.09. In continental Europe, the CAC-40 finished 0.13% higher at 5,309.23 whilst the DAX was down 0.07% at 12,461.91.
Wall Street
Last night in New York, the Dow Jones added 164.7 points, or 0.66%, to end the day at 24,962.48. The S&P 500 ended 2.63 points higher at 2,703.96 but the tech-focussed NASDAQ fell 8.14 points at 7,210.09.
Asia
In Asia this morning, the Nikkei 225 was 145.69 points higher at 21,882.13 heading into the close. The Hang Seng was up 0.83% at 31,221.77 and the Shanghai Composite added 0.1% at 3,271.82.
Oil
At around 6:00am, WTI crude was 0.08% lower at $62.72 per barrel and Brent crude was down 0.15% at $66.29 per barrel.

Headlines
RBS reports first profit in 10 years
Royal Bank of Scotland (RBS.L) has returned to profit for the first time in a decade as it continues its recovery. Chief executive Ross McEwan told the BBC it was "a symbolic moment." The bank, which is majority-owned by the taxpayer, made an annual profit of £752m compared with a £6.95bn loss the year before. RBS still faces a potentially massive fine from the US Department of Justice over the sale of financial products linked to risky mortgages. The bank had expected to settle the case this year.
Source: BBC News

Company news
Lloyds Banking Group (LON:LLOY, 69.72p) – Buy
Lloyds Banking Group (LBG) has reported very solid 2017 results with all key metrics moving in the right direction, so the positive momentum from the first three quarters of 2017 carried forward into Q4. The outlook for 2018 is also positive, with key ratios all likely to improve further. We reiterate our Buy recommendation with 80p target price.

Looking in detail, Q4 Net Interest Income (NII) improved 14% Y/Y, with Underlying profit up 7%, similar to the full year growth rate. All of LBC’s divisions contributed, with Retail and Commercial Banking particularly strong.

LBC’s CEO Antonio Horta-Osorio stated that the UK’s “Open Economy” status with exports growing ahead of imports should allow GDP growth in 2018 at a rate “similar to that of 2017”. This has allowed the Board to raise the 2017 underlying dividend by 20% Y/Y and initiate a £1bn share buy-back programme.

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