The CEO still remains confident on the group’s business model.
Mixed bag from Lloyds (LLOY) as it warns on Brexit uncertainty
- Pre-tax profit fell below expectations at £1.6bn, as one-off costs and charges hit bank in Q1.
- The CEO remains confident however, reiterating its financial targets for the year.
- We continue to recommend the stock as a ‘hold’ for income seekers.
The Q1 update from Lloyds Bank this morning reports a pre-tax profit slightly below expectations at £1.6bn. There were a number of one-offs included in the numbers such as costs related to exiting from the investment management contract with Standard Life. Revenue growth also disappointed but was probably to be expected in view of the current trading environment in the UK and the net interest margin although lower was as expected at 2.91%.
The group reiterated on its financial targets for the year. The CEO, who remains confident on the group’s business model, highlighted continued progress with its strategic plan, but as usual there was the concern over Brexit uncertainty which could impact the economy further.
The shares, which were given a boost yesterday regarding lower capital requirements, fell by around 1% in early morning trading.
Our View on Lloyds - Hold
We maintain our ‘hold’ recommendation and would suggest the shares should be viewed increasingly positively by income seekers who have a medium appetite for risk.
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