Lloyds Banking Group is a leading provider of financial services to individual and business customers in the UK, whose main business activities are retail and commercial banking and long-term savings, protection, and investment. The Group operates the UK’s largest retail bank and has a large and diversified customer base.
Its shares have a premium listing on the London Stock Exchange (symbol: LLOY), have a market cap of £31bn and are a constituent of the FTSE 100 index.
We were delighted to welcome Douglas Radcliffe, Group Director of Investor Relations and Andrew Pipe, Head Economist, to the latest Yellowstone Advisory and ShareSoc webinar to provide an update on the recent third quarter results and the groups plans going forward. A recording of the webinar is available here.
The webinar started with a presentation from Andrew on the Lloyds’ view on the UK economy, which is key to Lloyds performance going forward given 97% of their business is generated in the UK and the performance of the UK economy has a big impact on their impairment charge and consequently profitability. The economy suffered significantly from the pandemic and is still recovering from this, there has been a huge impact from the Russian invasion of Ukraine and inflation is currently running at over 10%, a figure that many people will have never experienced before.
That said the UK economy is performing better than many people had assumed. GDP is also back to pre-pandemic levels, we have the lowest unemployment since 1974, house prices have grown 20% to record levels versus household income and commercial real estate is up 10% despite concerns that working from home would have on the sector. Its not all rosy as we have witnessed a weaker GDP recovery than some other western economies, low unemployment has been impacted by a big increase in the number of inactive people and long-term sick. So the economy could do with some help and factors that were highlighted as important included: improving health outcomes, productivity growth, investment in education, training and skills and infrastructure. There is also the immediate issue of the cost-of-living crisis which needs to be addressed. Higher energy costs will make the country 2-3% poorer and growth will not offset this resulting in the country going into recession. Higher costs feed into higher inflation and the Bank of England is raising interest rates in an attempt to prevent…
