Hargreaves Lansdown sees ‘a lot to like’ in Lloyds Banking Group’s (LON:LLOY) full-year results, Citywire reports. The comments came after the bailed-out lender updated investors on its performance yesterday, posting a rise in profits and signalling plans to give cash back to shareholders.
Lloyds’ share price surged in the previous session, adding 2.76 percent to close at 69.72p. The shares outperformed the broader UK market, with the benchmark FTSE 100 index adding 34.80 points to close 0.48 percent higher at 7,281.57. The group’s shares are up by more than five percent over the past year.
‘A lot to like’ in Lloyds results
Citywire quoted Hargreaves Lansdown’s analyst Laith Khalaf as commenting that there was ‘a lot to like’ in Lloyds’ numbers, “with profits rising, costs under control, and prodigious amounts of cash being thrown off to shareholders”. He, however, cautioned that a shock to the UK economy “would be keenly felt by the bank”.
“However, the combination of the dividend and the new share buyback scheme means shareholders are getting a pretty tasty six-percent return on their investment, which offers some compensation for the chance that Brexit may unfold in a messy manner,” the analyst concluded.
Strategy to calm investors
City A.M. meanwhile quoted Jason Napier at UBS as commenting that Lloyds’ strategy update would calm investors.
“Plans to grow revenues at stable margins, cut costs and generate surplus capital should reassure investor concerns, we think,” with potential profit upgrades and a “steady stream of buybacks” expected down the line, the analyst commented.
The newswire also quoted Jefferies’ Joseph Dickerson and Kapilan Pillai as pointing out that while the underlying profit before tax missed by one percent, the results nevertheless looked ‘robust’ and consistent with the broker’s ‘buy’ thesis.