Lloyd’s Banking Group PLC (LON:LLOY) have seen an interesting few weeks, as the shares faced a setback since the December election, where shares initially rallied.
Shares in Lloyds Bank trade at 57p (-0.44%). 13/2/20 12:26BST.
The share price of Lloyds has hovered around the late 50p and early 60p ball park over the last few months, however is yet to hit 70p.
The 52 week high has hit 73.66p, but has also seen lows of 48.16p showing its volatile nature.
Combined with this, the 50 day moving average has flirted with the 60p but has just remained shy at 59.53p. Whilst the 200 day moving average has been slightly lower at 56.75p.
Could Lloyds shares hit 70p?
Lloyd’s face tough media scrutiny
Lloyds have been put in bad media spot light over the last few weeks, and this has hindered the upwards movement of its price.
In December, the British bank was faced with much public scrutiny as it failed the Bank of England Stress Test.
Lloyds initially did pass the Bank of Englands annual assessment in the balance sheet department.
However, plans to double a 100 basis point capital buffer designed to protect lenders in depressed economic conditions could put both bank’s 2020 share buyback plans in jeopardy, analysts said.
In addition to this, Lloyds also received criticism for mistreating victims of major fraud.
The fraud at Halifax Bank of Scotland’s Reading branch led to six people being jailed in 2017 for a combined 47 years.
The scam involved small business customers being referred to consultancy for bribes which included watches, holidays and sex with prostitutes.
The bank’s compensation scheme for victims had ‘serious shortcomings’, retired judge Ross Cranston said in a review.
The bank has paid £102 million in compensation to 71 businesses and 191 directors over the fraud.
Additionally Lloyds said it would offer all victims the option to have their cases independently reviewed.
The Financial Conduct Authority said it would consider ‘further action’ against Lloyds over the failings, adding that they needed to be addressed quickly.
Certainly, Lloyds will have to face their public image issues if they are to fill their shareholders with any confidence.
Third Quarter slump
Aside from the bad news coverage, Lloyds have also seen their profits and performance slump over the last few months.
At the end of October, the firm reported a a 97% fall in pre-tax profit for the third quarter from last year.
The company’s profit before tax for the third quarter fell 97 percent to £50 million from £1.82 billion last year.
Statutory loss after tax for the quarter was £238 million or 0.5p per share, compared to profit of £1.42 billion or 1.8p per share in 2018.
The third quarter results, received a bruising from a £1.8 billion payment protection insurance or PPI charge, driven by a high levels of PPI information requests received in August.
Additionally, net income for the quarter declined 6% to £4.19 billion from £4.45 billion pounds a year ago.
The earnings of Lloyds have been bruised, as Brexit complications and political landscape of the United Kingdom weigh down on not just Lloyds but all British banks.
Credit Suisse issued a target of 60p for Lloyds on 11/2/20, whilst Jefferies International took a more bullish stance recommending a buy rating with a 78p target on 22/1/20.
One thing that Lloyds can fix however is their reputation within the market, and the firm will have to bounce back from a tough few months of trading if shares are to be lifted in excess of 60p.
