Opinions
Darren Sissons
Lloyds Banking Group
LLOY-LN
WEAK BUY
Dec 11, 2019
Brexit impacts? The Brexit overhand is likely already priced into UK equities. Lloyds tend to be a very domestic based bank, so if the economy lags there it will get hurt more than more international banks. Overtime, taking in a longer time view, you could probably buy here, but he would prefer a more international bank.
$0.615
Stock price when the opinion was issued
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WEAK BUY
European banks are becoming more stable. It has had a good bounce as a hard Brexit is looking less likely. This is the best UK bank as it trades around book value. He would complement this along with a large US bank for growth and a Canadian bank for the dividend. Yield 3.6% plus an annual special premium.
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DON'T BUY
He doesn't recommend any European or UK banks. They were hoping to expand beyond mortgages (where they led) to investment products, personal lines of credit and small business loans. It's unclear they succeeded. There are a lot of banks in the UK and it's difficult to stand out. Also, Lloyds faces competition from the Americans who don't have a legacy loan book. Also, more of the UK/Euro market is moving to corporate bonds and away from whole loans. Lloyds is more of a personal lender, though.
Financial Services
DON'T BUY
All banks have been clobbered. He'd rather buy a Canadian bank or MS. The UK housing market is a question mark for 12 months. Lloyds will bear loan losses heavier than its peers.
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