Opinions Darren Sissons
Lloyds TSB Group PLCLYGHOLDDec 22, 2014
Darren SissonsStock price when the opinion was issued
As of Jun 09, 2026. Market Open.
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He sold in 2013/14 because cross selling did not work. They were going to increase returns to shareholders and that did not materialize. As a British bank they are in a better position than a European bank. But he does not want to be a British bank because the American markets have access to your capital. He thinks the outperformance of non-Canadian banks is probably over.
He sold in 2014-5. The bank was working off the bad loan book and releasing capital, and selling off bad loans. They hoping to return their book of business back to growth. Because they'd underwritten most UK mortgages, they hopes that by cross-selling they could grow their share. That didn't work, so he exited.
Lloyds Bank ADS (LYG-N) vs the S&P 500. Lloyds is a British Bank with a strong retail franchise in the US. Probably the S&P 500 could make sense for a retail investor. It is a difficult thing to compare because one is an index and the other is a single stock.
Paul Harris, CFAHe sold his Lloyd’s shares several years ago. He invested with the expectation of some catalysts: that they would expand their business by increasing the number of types of services they provided to each customer and that they would significantly increase their dividend. Neither increased to the extent that he had planned for and he doesn’t see significant catalysts for growth now. (Analysts’ price target is 76p compared to a current stock price of 67 pence).
This is a good story. If you look at the global interest rate story, he thinks it will be US 1st and the UK will probably be 2nd in terms of raising rates. There was an 18 month time lag from when the US went into the hole and when the UK went into the hole. Continental Europe went in even further. With that time frame, interest rate increases are going to be very good for the banking sector. The US is probably going to see this first. This bank hasn’t introduced a dividend as far as he knows, and the government is selling down its stake from when it bailed the bank out. If this bank were to introduce a dividend, post the governments sell down, he thinks this bank would run. This could be a 2016 story. When it runs, it is going to be huge.