K BRADEN | S&P EQUITY RESEARCH
Non-core assets have been reduced 22 per cent year to date, but further reductions of the £151bn balance will prove challenging in the current environment, in our view... With António Horta-Osório out on medical leave until Christmas and interim Tim Tookey leaving the company in February, management succession remains a concern. We recommend a sell.
BRUCE PACKARD | SEYMOUR PIERCE
If the current weaker economic conditions persist, medium-term income targets may be delayed to beyond 2014. There don’t seem to be any monsters in these results and we welcome Lloyds’ eventual acknowledgement of reality, but we would offer an alternative explanation for the rebasing of expectations: over-ambitious guidance to investors in the first half of 2010. Hold.
IAN GORDON | EVOLUTION SECURITIES
António is very highly regarded – but is he really that good? For all the hyperbole, today’s statement is hardly worse than expected – third quarter net interest margins of 2.05 per cent is (as promised two weeks ago) consistent with guidance given in August – despite the headwind of sharply rising short-term wholesale funding costs... We see a clear value opportunity. Buy.