Lloyds share price in focus as bank releases interim update

on Oct 26, 2016
Updated: Oct 21, 2019

Lloyds Banking Group’s (LON:LLOY) share price will be under the spotlight today, as the bailed-bank posted its results for the nine months ended 30 September 2016.

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**Highlights from the company’s statement:**
· Underlying profit of £6.1 billion (2015: £6.4 billion); underlying return on required equity of 13.6 per cent
· Total income of £13.2 billion
– Net interest income of £8.6 billion, up 1 per cent with improved margin of 2.72 per cent
– Other income 2 per cent lower at £4.5 billion
· Operating costs 2 per cent lower at £6.0 billion. Market-leading cost:income ratio improved to 47.7 per cent with positive operating jaws

· Asset quality remains strong with no deterioration in underlying portfolios. Asset quality ratio of 14 basis points
· PPI provision of £1 billion to cover further operating costs and redress
· Statutory profit before tax of £3.3 billion, more than 50 per cent higher than in 2015
· Tangible net assets per share of 54.9 pence post interim dividend (30 June 2016: 55.0 pence)
Strong capital generation with balance sheet strength maintained

· Common equity tier 1 (CET1) ratio of 14.1 per cent pre dividend (13.4 per cent post dividend); total capital ratio of 22.1 per cent
· Net capital generation of 0.6 percentage points in third quarter
Our differentiated UK focused business model continues to deliver for customers and shareholders
· Helping Britain prosper through continued support to SMEs, first-time buyers and growth in consumer finance
· Cost discipline and low risk business model providing competitive advantage
2016 guidance reaffirmed
· Net interest margin for the full year expected to be around 2.70 per cent
· Full year cost:income ratio to be lower than 2015 ratio of 49.3 per cent
· Asset quality ratio for the full year expected to be less than 20 basis points
· Continue to expect to generate around 160 basis points of CET1 capital in 2016 pre dividend
António Horta-Osório, Group Chief Executive, commented on Lloyds’ performance: “In the first nine months of the year the Group has delivered a robust underlying performance with a strong improvement in statutory profit and strong capital generation. Our differentiated, UK focused, simple, low risk business model continues to deliver and as a result we are reaffirming our stated 2016 guidance.”
**More to follow…**
As of 07:23 BST, Wednesday, 26 October, Lloyds Banking Group share price is 59.42p.


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Finance & Banking Stock Market