Opinions Paul Harris, CFA
Lloyds TSB Group PLCLYGCOMMENTNov 02, 2017
Paul Harris, CFAStock 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).
ING (ING-N) or LLOYDS (LYG-N)?This is predominantly a retail bank in the UK, and ING is predominantly a retail bank in the Netherlands. ING actually had to sell off a lot of businesses. Lloyds is a great business with a great return on equity, and trading well above BV, and is much more fully valued. ING is probably the stock to own over the next little while. They've taken a lot of costs out, and you should see a growth in earnings.