Lloyds Banking Group (LON:LLOY) has moved to invest in a fintech firm as it continues with its digital transformation, the bailed-out lender has said. The moves comes as the bank, rescued by the UK taxpayer at the height of the financial crisis, disclosed this week that it was cutting 6,240 jobs and creating 8,240 new ones as it overhauls its digital services.
Lloyds’ share price has fallen into negative territory in London this morning, having given up 0.77 percent to 59.19p as of 08:53 GMT. The decline is largely in line with losses in the broader UK market, with the benchmark FTSE 100 index currently standing 0.61 percent lower at 7,097.22 points.
Lloyds invests in Thought Machine
Lloyds announced a strategic partnership with fintech company Thought Machine this week, noting that it was in line with its Strategic Review, announced earlier this year. Under the terms of the deal the blue-chip group has made an £11 million investment in Thought Machine, representing a 10 percent stake, as part of its ‘Series A’ £18 million investment round.
“A key part of our recently launched three-year strategic plan is applying technology innovation to meet our customers’ evolving needs,” Zak Mian, Group Director, Transformation at the bailed-out lender, commented in a statement.
Thought Machine is a UK-based growth stage technology company whose core product, Vault, is a cloud-native next generation banking platform. Lloyds explained that it had completed testing and proofs of concept, and continued to work with Thought Machine to develop the capabilities of Vault. The FTSE 100 lender expects to enter into a development and deployment phase in 2019.
Analysts on bailed-out lender
Royal Bank of Canada, which rates Lloyds as a ‘buy,’ set a price target of 90p on the shares last week. According to MarketBeat, the blue-chip lender currently has a consensus ‘buy’ rating and an average price target of 76.28p.