Breakingviews

UK banks have much to fear from latest probe

July 18, 2014

Britain’s top antitrust watchdog has warned lenders to expect a full-blown competition investigation. Forced divestments would be a surprising outcome. But given the persistence of concern in spite of past probes, investors should brace for radical, profit-sapping remedies.

Lloyds still looks best of a bad bunch of UK banks

February 3, 2014

The past weighs on the UK lender, with charges for mis-selling up another 1.8 bln stg. Dividends will be smaller than hoped and the next stage of privatisation could be rocky. But given Lloyds’ durable strategy and market position, its premium valuation looks intact.

Lloyds can’t get too cocky after Royal Mail pop

October 11, 2013

The state-backed bank must be tempted to focus its next share sale on small punters after they helped turbocharge the postal service’s IPO. But political touchiness about Lloyds’ in-price makes a retail-only sale complicated. Lloyds should target a broad mix of buyers instead.

Lloyds’ shares look a better bet than Barclays’

September 16, 2013

The two UK banks are the focus of forthcoming share offerings. Barclays is selling 5.8 bln stg of new stock in a rights issue; the government is set to sell down its stake in Lloyds. Barclays is risky but cheap; Lloyds is more steady but pricier. Still, Lloyds looks better value.

UK banking report pulls more punches than it lands

June 19, 2013

The long-awaited parliamentary report on UK banks is underwhelming. A “Fred Goodwin” law that could put the reckless in prison is a bold idea. A call for an inquiry into banking competition is right but hardly novel. Ultimately, the work is long on words and short on deeds.

Chris Hohn’s Lloyds plan isn’t pure self-interest

June 20, 2012

The activist investor wants the UK bank to turn 10 bln pounds of contingent convertible debt into equity. Hohn would probably profit from the move. But if the notes are redundant, turning them into higher-quality capital would benefit Lloyds - and might help the government too.

Lloyds investors’ long wait may soon be over

May 2, 2012

The UK bank used the first quarter to speed up non-core disposals and nail down 2012 funding. Further mis-selling provisions, a misfiring branch sale and a miserable UK economy remain dark clouds. But if a few regulatory decisions go Lloyds’ way, it could soon restore dividends.

Lloyds forced disposals inch towards quasi-auction

April 13, 2012

The race to buy 632 branches the UK bank must sell to meet state-aid rules had seemed all but won by the Co-op mutual group. Now new entrant NBNK is detailing a rival pitch. The odd nature of the two bidders may rule out a hot auction. But at least Lloyds has a choice of buyer.

Lloyds’ return to form will be worth the wait

February 24, 2012

The UK bank failed to say when dividends may resume, warning instead of a weak operating environment. But its restructuring is going well and the core bank earns high returns. If the UK economy recovers, the investment case is much clearer than at rival state-backed RBS.

UK bank pay collusion would be least bad solution

By Hugo Dixon
November 15, 2010

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public." Normally, Adam Smith's dictum is a good guide to policy. But in the case of UK banks and their bonuses, it isn't.