Latest news with #UKbanks
Yahoo
4 days ago
- Business
- Yahoo
The Lloyds share price is up nearly 200% over 5 years! What about the next 5 years?
The Lloyds (LSE:LLOY) share price has climbed nearly 200% over the past five years. Admittedly the starting point was the pandemic. However, for investors, this rebound is a testament to how strongly the company and the sector overall have recovered after a long and difficult period for UK banks. The question now is whether this momentum can be maintained into the next five years. This depends on why Lloyds shares have recovered so sharply, what's moving the shares today, and the challenges and opportunities ahead. Things just got better Lloyds's recent resurgence is mainly down to stronger earnings, reduced credit risk, and a re-rating of UK banks by investors. The company has consistently delivered improved earnings, with its latest underlying figures showing more solid growth in net interest income and cost discipline. Unlike the dark predictions made during the post-pandemic period and the height of the cost-of-living crisis, bad loan charges have remained under control, mainly because mass defaults among consumers and businesses have not materialised. With defaults in check, investors have been able to focus on the bank's stable cash flows and attractive dividend. Meanwhile, the entire UK banking sector has been re-rated. Investors are now more willing to pay higher price-to-earnings ratios as fears over financial stability and the impact of Brexit have faded. Fresh momentum A big catalyst recently has been some much-needed legal clarity around the car finance mis-selling scandal. This case had cast a shadow over Lloyds and its rivals. The Supreme Court sided mostly with the lenders, reducing the threat of massive compensation payouts. Lloyds has already set aside over a billion pounds for possible claims, but the judgement removed a lot of the market's uncertainty. That's given brokers and shareholders reason to become more optimistic about the stock's outlook. It's not going up another 200% Looking ahead, however, things could get a litter trickier. Bank shares like Lloyds tend to move in step with the economy, and the UK's economic outlook is mixed at best. Growth is poor and the confidence in our economic leaders is deteriorating. However, interest rates remain supportive. Lloyds's huge deposit base and simple lending model should help margins stay resilient for a while. The bank has also benefitted as it unwinds the financial hedges put in place in the era of ultra-low rates. While risks remain, Lloyds's foray into being a residential landlord, via its Lloyds Living brand, is a bold new venture. It comes with its own uncertainties and will take years to prove itself. However, it's certainly worth keeping an eye on. It already has a portfolio of over 6,000 homes. So, after such a dramatic recovery, Lloyds shares may not see another 200% rise soon. However, legal clouds have lifted, earnings are strong, and there are some new growth drivers. I believe it's worth considering as a long-term investment. I'm continuing to hold my shares, with the expectation of modest gains. The post The Lloyds share price is up nearly 200% over 5 years! What about the next 5 years? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Fox has positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Lloyds Banking Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
Yahoo
03-08-2025
- Automotive
- Yahoo
UK's FCA proposes redress scheme for motor finance claims
LONDON (Reuters) -Britain's Financial Conduct Authority (FCA) said on Sunday it was proposing a redress scheme for consumers with motor finance claims following a Supreme Court ruling last week. "At this stage, we think it is unlikely that the cost of any scheme, including administrative costs would be materially lower than 9 billion pounds and it could be materially higher," the FCA said in a statement. The United Kingdom's top court on Friday ruled car dealers who sold vehicles and arranged the finance did not owe fiduciary duties to customers, and lenders were therefore not liable for the commission. The decision pushed up U.S.-listed shares of UK banks because it eased investors fears of a redress scheme that some analysts had warned could run into the tens of billions of pounds. But on Sunday the FCA said that after considering the judgement, it was still proposing a scheme and would consult on what it should look like. "Our consultation will cover how firms should assess whether the relationship between the lender and borrower was unfair for the purposes," the statement said. "Any redress scheme must be fair to consumers who have lost out and ensure the integrity of the motor finance market, so it works well for future consumers." Sign in to access your portfolio
Yahoo
31-05-2025
- Business
- Yahoo
Lloyds shares recently hit a 52-week high — is it too late to consider buying?
Lloyds (LSE: LLOY) shares recently touched a 52-week high of 79.19p, a welcome sight after years of volatility and pandemic-era underperformance. The last time the shares traded that high was late 2015. Naturally, this is a promising sign for long-suffering shareholders like me. But for new investors, the question is whether the recent rally leaves any value on the table – or if the opportunity has already passed. The share price has climbed over 40% year to date, supported by a modest improvement in investor sentiment towards UK banks. A sector-wide upgrade by analysts has also helped. Rising interest rates have expanded net interest margins, even as economic data suggest the Bank of England may begin easing rates in the second half of 2025. In this environment, Lloyds — with its domestic focus and large retail deposit base — could emerge as a key beneficiary. But the bank's latest Q1 results weren't flawless. Underlying profits fell 7% to £1.52bn, with the bank putting aside £105m to prepare for a potential rise in bad loans. The decline was partly due to higher operating costs and regulatory charges. These challenges, combined with ongoing economic uncertainty, could weigh on performance in the second half of the year. Despite the mixed earnings, Lloyds continues to return cash to shareholders in the form of dividends. The 2024 final dividend of 2.11p per share was paid in May, bringing the full-year yield to around 4.7% at current prices. The group also announced a £2bn share buyback earlier this year. For income-focused investors, that's attractive. While not the highest yield on the FTSE 100, it's backed by a well-capitalised balance sheet and a CET1 ratio of 13.7%. Provided the UK avoids a severe downturn, the dividend looks sustainable. Like many high street banks, Lloyds is grappling with the shift to digital, recently announcing plans to close 136 branches across the UK by March 2026. The bank has committed to no job losses, but the move underscores a broader transformation — and the costs associated with it. At the same time, Lloyds is investing in technology and digital services, aiming to improve efficiency and customer experience. While the upfront expense is significant, these efforts could position the bank more competitively over the long term. Even after the recent rally, Lloyds shares still trade below their pre-pandemic levels. The stock's valued at around 7.5 times forward earnings — an attractive valuation by historical or sector standards. That offers a margin of safety for value-oriented investors. However, growth may be modest. As a largely UK-focused bank, it lacks the international diversification of some rivals. Any setback in the UK housing market or rise in unemployment could quickly impact performance. Lloyds shares may no longer be the deep value play they were last year, but they still look reasonably priced for long-term investors seeking income and gradual capital growth. While not without risks, the bank's stable dividend, improving sentiment and leaner cost base make it worth considering for a diversified passive income portfolio — even near a 52-week high. The post Lloyds shares recently hit a 52-week high — is it too late to consider buying? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Mark Hartley has positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Lloyds Banking Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
