LLOY - Lloyds Banking Group PLC

[evilsatan]

Meant to post this the other day but forgot. Not quite sure what this means for the market as I have only started out in shares this year. Dipped my feet into Lloyds at 50p a share though so currently at minor profit.

Lloyds 'mulls demerger of commercial property arm'

Published Date: 15 March 2010
By Martin Flanagan
LLOYDS Banking Group is thought to be considering a possible demerger of a sizeable slug of its depressed commercial property arm into a tax-efficient investment trust.
It is understood such a move would see some of the £50 billion to £75bn of assets and loans inherited via Lloyds' takeover of the distressed HBOS commercial property portfolio spun off.

However, analysts said yesterday that complicating such a decision would be the fact that, with the taxpayer owning 41.3 per cent of Lloyds, any incoming government would need to keep a significant holding in the new property vehicle.

One analyst said: "The advantage of REIT (real estate investment trust] status for these assets is it would be great in terms of clarity for judging and analysing Lloyds.

"Last year's losses at Lloyds were largely due to writedowns on HBOS's commercial property portfolio, and it will overhang the group for a time.

"Stripping a large part of that property arm out would help distance the problem from the wider operations of the bank."

However, other analysts said the crucial factor would be just what assets might be put in any REIT and who would manage it.

A Lloyds spokesman declined to comment. Industry sources say the REIT option was just one of a number being discussed by the bank's board.

Lloyds made a loss of £6bn in 2009 following writedowns on assets of £24bn that chief executive Eric Daniels said was "principally due to the HBOS portfolios and their high level of exposure to commercial property".

It is thought the bank aims to cut back its loan book by as much as £200bn over the coming years.

Real estate investment trust status has mainly been adopted by traditional property giants such as British Land, Hammerson and Land Securities, but has also been investigated by other sectors, including pubs, where Enterprise Inns and Punch Taverns are understood to have looked at the possibility.

Mark Collins, former chief operating officer at Land Securities, joined Lloyds last autumn as "solutions director" at the bank's business support unit to look at ways of dealing with problems in the HBOS-inherited property portfolio.

The portfolio had previously been run by former Bank of Scotland employee Peter Cummings.

http://thescotsman.scotsman.com/busi...ial.6150718.jp

[evilsatan]

Good news this morning has bumped Lloyds to 59-60p day trading so far, up 4-4.5p on yesterdays fall.

Lloyds predicts profit for 2010
By Lee Wild

Date: Friday 19 Mar 2010

LONDON (ShareCast) - Part-nationalised lender Lloyds Banking will be profitable on a combined businesses basis in 2010, chief executive Eric Daniels claimed Friday.

In a short statement ahead of a presentation at the Morgan Stanley European Financials Conference later today, Daniels said trading in the first 10 weeks of 2010 had been “strong”.

The boss is pleased with the bank’s performance against each area of recent guidance provided last month when the company reported a smaller than feared £6.3bn pre-tax loss.

“The banking net interest margin is trending in line with recent guidance and this has supported a good level of income growth, on a combined businesses basis and excluding last year's gains from liability management transactions,” Daniels said.

Costs are lower than at the same time last year, while impairment provisions are trending at lower levels than forecast, leading Lloyds to expect a better impairment performance than previously guided in both the retail and corporate businesses in 2010.

Impairments were 21% lower in the second half of 2009 than in the first six months and a similar pace of half yearly improvement was expected through 2010, Lloyds told investors in February.

It had also flagged a ‘significant improvement’ in the performance of its continuing businesses for this year and set a target of high single-digit income growth within two years.

“Overall, based on the group's current economic and regulatory assumptions which remain unchanged since our recent 2009 preliminary results announcement, the group believes that it will be profitable on a combined businesses basis in 2010,” Daniels concluded Friday.

The next update is due on 27 April.

[Clubber Lang]

Pulling RBS along with it.

[pumpman]

from here http://www.bbc.co.uk/blogs/thereport....html#comments

Hold the front page: big bank says it's going to make a profit. Why are we holding the front page? Is Lloyds going to present its balance sheet, print it on the front page – with facts and figures that can be audited? The Lloyds statement itself was brief, saying that the (partly-nationalized bank) in the first 10 weeks of the year has shown “net interest margin that has come in line with guidance” (What does that mean?)
Why were NO FIGURES INCLUDED?
What worries me is that on this verbal statement alone, Lloyds shares jumped @ 10% to 60.96 pence on the London Stock Exchange.
Okay, so lacking figures from Lloyds, the next questions become:
Who did the analysis and what exactly did they say?
Andrew Lim, an analyst at Matrix Corporate Capital LLC in London: “We are actually quite positive on Lloyds’ earnings,” but with a “hold” rating on the stock. What is the risk factor causing the "hold"?
The risk remains “that the market will increasingly come to view the company as under-capitalized under Basel III” rules. The bank may need to raise as much as 7.8 billion pounds to meet new capital rules proposed by the Basel Committee on Banking Supervision that will come into effect in 2012.”
Hmmmm – undercapitalized? Where have I heard this before?
Its accounts are indeed confusing. I don’t know how confusing they are because I can’t seem to find an intact balance sheet.
So what's driving the recovery?
Ian Gordon, analyst at Exane BNP Paribas in London: Lloyds had indicated its 2010 impairment charge would be about 15B pounds. Ian Gordon has an “outperform” rating on the stock. He says: “0ur forecast was 14.3 billion pounds, and today’s unscheduled trading update suggests that the outturn may yet be even better.”
Careful, careful, all you anxious investors! This point is actually circular reasoning. Lloyds announces unexpected profits; the stock jumps, and one reinforces the other, but neither proves the other.
Here’s the most important thing I can write: I've come across no balance-sheet figures:
What caused the the impairment charge (which was £13.4bn) to drop to £10.6bn (which by the way is still quite a lot).
Lloyds says: I try to ignore anything a company says because companies (for the most part) always put facts and figures in the best possible financial light.
But here's something interesting: Lloyds Banking Group Plc will allow customers to increase mortgage repayments without penalty.
Why?
Lloyds wants to cut its 1.03 trillion-pound (It may actually be $1.55 trillion.) balance sheet. This sort of move is generally called "reducing through the back door".
If this is the sort of stuff on the balance sheet, I'm really concerned about the whole of it.
Why is my key-note so important?
Lloyds is badly undercapitalized.
Andrew Lim, analyst at Matrix Corporate Capital LLC in London: “They need to reduce the size of their balance sheet. The negative is that the people who are likely to be overpaying will be the people who are good credits, leaving Lloyds with the bad credits.”
And try not to forget Lloyds loan-to-deposit ratio was 169%.
Why is this important?
Because Lloyds lends more than it gains from customer deposits, and 169%is high.
So, hold the front page. I'm waiting for the actual balance sheets (with footnotes telling me what money went where and when).
As for you folks who jumped on the investment, best of the luck.