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Lloyds (LLOY) up 0.014% despite 72% fall in 2020 profits
Lloyds Banking Group (LLOY) shares closed 0.014% higher on Wednesday even though its pre-tax profits plummeted 72% in 2020.
In its latest report released in midweek, Lloyd’s posted a £1.2bn profit for the year to December 31st, which was a considerable drop from the £4.4bn in 2019 but still around £300m ahead of the analyst consensus.
Lloyd’s said it had set aside £4.2bn in anticipation of a rise in defaults linked to the pandemic.
Q4 returns were healthier as a profit of £792m for the final three months of the year comfortably surpassed the £471m estimates.
Outgoing CEO Antonio Horta-Osorio said Lloyd’s fortunes are still “inextricably linked” to a UK economy that is still struggling due to Covid-19.
He did note that there were “positive developments” within the company, a sentiment echoed by Jefferies analyst Joseph Dickerson.
“2021 guides tick to better net interest income and credit and suggest upside to consensus,” Dickerson said on Wednesday.
Lloyds, like HSBC (HSBC), is planning to reduce its office space by 20% by 2023 as it looks to become more agile.
Horta-Osorio, who is set to formally step down in late April and be replaced by Charlie Nunn in August, said the move to a hybrid way of working would enable it to attract a younger, more diverse pool of potential employees.
Lloyd’s shares dipped into negative territory in London on Wednesday before a late rally saw shares move higher to 39.34GBX.
HSBC said earlier this year that its profits fell 34% in 2020, though the +$8.78bn figure was still up on the $8.33bn expectations.
HSBC made share gains on Wednesday, rising 1.51% to $30.32 in New York.
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