Hobson: “A Mixed Bag of Results from the Banks”

THE WEEK: Morningstar columnist Rodney Hobson says the latest banking results show ‘satisfactory’ gains are the best investors can hope for

Rodney Hobson 26 February, 2016 | 10:46AM

Banking results so far suggest that Lloyds (LLOY) is as good a prospect as any in the sector, and that the recent heavy fall in the shares price was grossly overdone. As a shareholder, I was more than a little relieved at the way they have bounced back.

I’m not suggesting that figures for 2015 were particularly sparkling but they were at least satisfactory. Coming after disappointing figures from HSBC (HSBA) - where underlying profits were down 7% - and a worrying statement from Standard Chartered (STAN), which produced its first annual loss in 25 years, that was a bit of a relief.

Underlying profits at Lloyds were up 5% and costs were lower, which is going in the right direction. It is true that the dreaded Payment Protection Insurance (PPI) continues to rear its head but I suspect that some of the provisions already taken will be written back one day, especially if, as I expect, a time limit on claims is imposed.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Barclays PLC117.76 GBX5.18
Barratt Developments PLC543.60 GBX2.14
Bovis Homes Group PLC720.00 GBX0.84
Galliford Try PLC102.66 GBX-1.53
HSBC Holdings PLC377.80 GBX1.21
Lloyds Banking Group PLC30.46 GBX2.42
Persimmon PLC2,635.00 GBX1.78
Standard Chartered PLC434.20 GBX1.26
The Royal Bank of Scotland Group PLC121.50 GBX2.92

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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