Lloyds Banking Group plc

Lloyds Banking Group delivered a solid financial performance in the first half and Q2 and managed an all-around beat in the last quarter. Return on tangible equity was also impressive during this period. The bank demonstrated resilient asset quality, and its customer franchise remained steady, with total lending balances and deposits maintaining a stable position. Lloyds’ structural hedge continued to provide a substantial earnings tailwind while the bank exhibited effective cost management and prudent risk practices. The group’s capital position remained robust, surpassing its ongoing target, and allowed for an increased interim dividend. Looking ahead, Lloyds has a positive outlook for 2023, with increased revenue guidance and solid prospects for capital generation. The management claims that their commitment to prudent risk management and its well-positioned mortgage portfolio contribute to its resilience and ability to successfully navigate a changing economic environment. Among other updates, the bank has also introduced an innovative payment transfer service, Lloyds Bank PayMe which could revolutionize business payments. We give Lloyds Banking Group a ‘Hold’ rating with a revised target price.