Lloyds share price pops as it considers US data center financing expansion

Lloyds Bank share price rose for two consecutive days, beating some of its top rivals like NatWest and Barclays. It rose modestly as the company mapped plans to expand in the United States, as it targets the fast-growing data center business. It was trading at 96.40p, up from this month’s low of 93.30p. 

Lloyds Bank to expand to the United States

LLOY stock price rose slightly after reports emerged that it was preparing an entry to the United States. Its focus will be to finance the booming data center business, which analysts expect will continue booming this year. 

According to FT, the company aims to create a US infrastructure bank that will also focus on other areas, including green energy. This business will see it finance US companies, including UK customers with US operations. In this approach, the company aims to focus on syndicated loans, a move that is often seen as being more conservative than other financing. 

The expansion to the United States comes at a time when UK banks have been more conservative when expanding to other countries. Indeed, after the Global Financial Crisis, the company shut its business in key areas like Spain, South Africa, and Switzerland. The company said:

“Supporting our UK-focused clients to expand their operations internationally is at the centre of our current strategy announced in 2022, and we are pleased to have steadily grown our business in the US throughout recent years, with further hiring plans in 2026.”

Lloyds has benefited from high interest rates

The most recent results showed that Lloyds Bank has become a more profitable company, helped by higher interest rates and its diversification strategy. For example, it has become a major player in the property market, where it is one of the biggest landlords. 

These results revealed that its net income rose by 8% YoY in the first quarter to over 3.56 billion pounds. Its total income rose by 9% to 4.78 billion pounds.

Most notably, the company’s statutory profit rose to 1.55 billion pounds, up by 37% YoY. This revenue growth will likely continue doing well in the foreseeable future as interest rates will remain at an elevated level in the coming months. 

Indeed, data shows that the UK inflation has remained above 3%, a move that will make it hard for the BoE to cut rates. At the same time, there is hope that the company will not be forced to pay more money in the motor insurance scandal.

Lloyds share price technical analysis

LLOY stock chart | Source: TradingView

The daily chart reveals that the LLOY stock has crashed in the past few months as the Iran war has remained.

It has remained above the 200-day Exponential Moving Average (EMA l), which has provided it with substantial support.

The stock has also formed a falling wedge pattern, common bullish reversal sign in technical analysis. It is about to move above the upper side of this pattern.

Therefore, the stock will likely have a strong bullish breakout, potentially to the key resistance level at 105.35p, its highest point in April. This rebound will be invalidated if it drops below the key support at 92.5. Such a move will lead to more downside, potentially to 87.45, its lowest point this month.