On 16 July 2009, Lloyds Banking Group (Lloyds) announced that it is to cut around 1,200 jobs in order to reduce costs following the merger with HBOS. We are encouraged by this move as it will provide crucial support to the bottom-line at a time when the income statement is straining under the weight of large provisions. Nevertheless, we remain concerned about the potential bottom-line impact of provisions over the coming quarters....

On 08 June 2009, Lloyds Banking Group (Lloyds) announced that it will redeem preference shares sold to the UK Treasury using proceeds from its recent rights issue. This will spare the bank from GBP480 mn in preferred dividends per annum, allowing it to resume paying common stock dividends. Despite this news, however, we remain concerned about a likely further rise in impairment charges over the coming periods. Therefore, even though the target price derived in our…

On 07 March 2009, Lloyds Banking Group (Lloyds) announced that it will participate in the UK government’s asset protection scheme, insuring GBP260 bn of toxic assets. However, we remain concerned about deteriorating asset quality at HBOS, as well as the likely impact of the ongoing recession in the UK on credit growth. Therefore, even though the target price derived in our last update…