Lloyds shares shrugged off a significant motor finance charge to produce the best initial reaction so far to this round of FY2024 results from FTSE 100 banks.

Shares rose 2% after releasing the full-year and fourth-quarter results to hit the highest intraday levels since early 2020.

Motor finance was always going to be the big talking point around Lloyd’s result, and the £700m wouldn’t have come as a surprise to investors. It was higher than some had expected, but it avoided the worst-case scenario.

However, as much of a disappointment as the motor financing charge is, Lloyds is actually doing quite well.

Stripping out the impact of the motoring charges, Lloyds underlying fourth quarter performance was ahead of expectations. Net income for the quarter came in at £4.37bn, marginally higher than the quarter before, and underlying net interest income was also higher.

Lloyds’ strong financial performance was underpinned by robust demand for mortgages, despite ongoing concerns about affordability. Lloyds UK mortgage book grew by £6.1 billion in 2024 and was central to increasing overall loans to £459.1bn.

“Lloyds has capped off a strong year with a clouded fourth-quarter result, setting aside a hefty £700m provision for potential charges related to the ongoing motor finance saga. While you could argue the provision is overly cautious, Lloyds holds the largest exposure of any major UK bank, and the outcome remains uncertain. Despite this, the stock is up over 40% in the past year, reflecting a solid banking outlook and robust performance,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“Beneath the surface, Lloyds is delivering strong results. Excluding the motor finance charge, fourth-quarter figures exceeded expectations, thanks to borrowers performing better than anticipated. Remarkably, Lloyds has managed to improve its loan quality over the course of the year, defying fears that borrowers would buckle under the pressure of persistent inflation.”

This strength was a key driving force in the Lloyds share price popping 2% higher on Thursday.

Lloyds shares were at a fascinating juncture going into results, with the stocks trading near the top of a range that has held over the past year. Today’s results have pushed Lloyds to the highest levels since 2020, but only marginally.

Whether Lloyds’s share price can continue to be higher will affect the health of the UK economy during 2025, as the bank seems to be doing everything right from an operational perspective.

Investors will also be delighted at the sheer level of distributions, which were bolstered by a fresh £1.7bn share buyback.

“There’s more than meets the eye in this year-end story and having returned around 10% of its current market cap to investors over 2024, there’s been plenty to cheer,” Britzman concluded.

Genflow Biosciences Plc, the London-listed biotechnology company, has achieved a significant milestone in its pursuit of longevity research patents.

Genflow Biosciences offers investors exposure to the existing world of longevity and anti-ageing and is one of very few listed longevity pureplays globally.

The firm announced that its licensed patent application for SIRT6 variants has successfully cleared the European Patent Office’s (EPO) supplementary search phase without additional queries.

SIRT6 is a gene recognised for its fundamental role in DNA repair, metabolism, and longevity. The patent’s progression to the national phase represents a crucial advancement in securing European-wide protection for this innovative therapeutic approach.

The patent application, which focuses on preventing and treating age-related diseases through SIRT6 variants, was initially submitted in May 2022 through a collaboration between prestigious American institutions: the University of Rochester, Columbia University, and the Albert Einstein College of Medicine.

The application, filed under number EP 22 808 414.1, has met all requirements set forth by the European Patent Convention. The company now preparing to advance the application ahead of the July 2025 deadline.

“This positive outcome represents a significant step forward in securing broad intellectual property protection for our innovative work on SIRT6 variants,” said Dr. Eric Leire, CEO of Genflow.

“This milestone strengthens our position in SIRT6-based therapeutics and accelerates our mission to develop effective treatments for age-related diseases.”

The FTSE 100 slipped on Wednesday as UK CPI inflation soared to 3%, and soft results from Glencore weighed on the index. 

A weaker pound helped contain losses for London’s flagship index. Still, the inevitable losses in house builders after the stronger-than-expected inflation reading meant the FTSE 100 struggled to turn positive after starting the session in the red.

UK CPI for January hit 3%, hotter than the 2.8% expected by economists, and poured cold water on hopes of a rate cut at the next Bank of England meeting.

“The FTSE 100 dipped at the open on Wednesday, dragged lower by weakness among housebuilders and as commodities giant Glencore fell on poorly received results,” said AJ Bell head of investment analysis Laith Khalaf.

“Higher-than-expected UK inflation was seen as reducing the chances of interest rate cuts from the Bank of England, which is bad news for a housebuilding sector reliant for demand on mortgage availability and affordability.”

Barratt Redrow was one of the most heavily hit housebuilders, with shares declining more than 2%. Taylor Wimpey fell by a similar amount.

Glencore was the FTSE 100’s biggest loser, falling 7%, after the diversified miner said EBITDA declined 16% due to lower coal prices. Copper was a bright spot for Glencore, with volumes growing 4% over the year. 

Suggestions Glencore was considering ditching its London listing wouldn’t have helped sentiment around the stock.

“Despite returning $2.2 billion to shareholders, Glencore is propping up the FTSE this morning after posting a second consecutive year of falling profit. It should be noted this was against a very high bar when we saw soaring metals prices which have since cooled, and as such so have miners such as Glencore’s bumper profits,” said Adam Vettese, market analyst at eToro.

“Trump’s potential tariffs on cars and semiconductors also threaten to weigh on demand for metals such as copper which Glencore and many of its sector peers will be watching closely.”

Despite concerns about the impact of Trump’s tariffs, Antofagasta was again the top riser following a well-received set of results yesterday. Anto gained another 3% and is now 19% higher on the year.

HSBC shares were flat following the release of Q4 and full-year 2024 results. The stock has embarked on a sharp rally through 2024, and investors will be pleased the stock held its own today and didn’t follow peers on the recent trend after pulling back after announcing results.

HSBC shares flatlined on Wednesday after the FTSE 100 banking giant released Q4 and full-year results that were largely ahead of expectations.

Although some investors may be disappointed the stock didn’t have more of a positive reaction, there will be a degree of satisfaction with the results and the performance of HSBC shares going into results.

“HSBC delivered a 9% beat on the profit line, driven by booming wealth management and non-interest income, while focusing on streamlining its operations with $3 billion in cost savings on the cards. There was a slight disappointment in impairments, which are higher than expected, signalling a potential shift from HSBC’s historically market-leading credit quality – a trend worth keeping an eye on,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

Guidance has been all-important so far in the current round of banking earnings with Barclays and NatWest shares falling on the day of their releases. There was a risk that any disappointment around HSBC’s outlook could see them go the same as their peers, given the sharp run-up HSBC shares have had going into results.

However, HSBC’s strong performance across the board and comparatively upbeat outlook assessment played a major part in supporting the shares on Wednesday.

HSBC said they expect $42bn of banking net interest income in 2025 and saw returns on tangible equity in the mid-teens through 2027.

“Guidance for the new year is ahead of expectations, but much of the positive outlook was already priced in given the improved US rate environment and expected cost management efforts.”

The wealth management business is firing on cylinders, which is central to HSBC’s strong performance. The company added 800,00 new wealth clients in Hong Kong, and the wealth business unit generated $12.2bn in profit before tax.

Of the $2bn increase in group operating profit, the wealth unit contributed around $550m.

“Momentum in the wealth businesses looks particularly notable,” said Alex Potter, investment director at abrdn.

Potter continued to explain that although HSBC’s results lacked any major excitement, the strategic decisions by the bank put it on good footing for long-term shareholder returns.

“The new CEO’s big strategic update looks sensible, if unspectacular, with another $1.5bn of explicit cost savings. Some more aggressive recent commentary had been talking about as much as $3bn of savings, so some may be disappointed today. However, the new return targets out to 2027 are admirable, a little above expectations and the yield looks very well underpinned, in our view.”

HSBC announced a fresh $2bn share buyback to bring total returns to shareholders $26.9bn.

NASDAQ-listed WeRide shares have soared since a filing last week revealed chip giant Nvidia had added the autonomous vehicle technology company to its portfolio of AI-related stocks.

Nvidia runs a portfolio of exciting early-stage public technology companies with deep roots in AI. In many instances, Nvidia has an existing partnership with the companies it acquires stakes in. Indeed, any company with substantive AI-related operations will likely have Nvidia chips in its technology stack.

Other holdings disclosed in Nvidia’s Form 13F filing were Arm Holdings, Applied Digital, Nebius, and Recursion Pharmaceuticals.

WeRide is a fascinating addition to the portfolio as it signals Nvidia’s recognition of the opportunity in autonomous vehicles as the adoption of the technology builds momentum.

WeRide has developed level 4 autonomous vehicle technology that is being tested and rolled out in 30 cities across nine countries, including the US, UAE and China.

Level 4 autonomous vehicles operate completely autonomously without the intervention of the driver, and these vehicles can operate without a driver in the car. There are few other companies operating level 4 AVs at any scale.

Perhaps the most notable element of its business model is that WeRide isn’t a vehicle manufacturer. Rather, it has partnered with organisations such as Nissan and Geely to bring their technology to market through a range of vehicle types.

WeRide’s autonomous vehicle product portfolio includes Robotaxis, Robobuses, Robovans, and Robosweepers, alongside advanced driver-assistance systems (ADAS).

While Nvidia’s investment doesn’t guarantee WeRide any commercial success – or even returns on the stock from this point after it more than doubled on news of Nvidia’s stake – it does underscore the momentum in the autonomous vehicle space.

Forecasters have predicted the global autonomous vehicle industry will be worth between $130bn – $13 trillion by 2030. It’s a large range, and we’re sure other consultancies and investment banks will have wildly different estimates. Nonetheless, there is a race for companies to set out of their AV stalls.

The early movers in this industry and those companies that successfully build relationships with consumers near the genesis of adoption will be well-placed to become major players in this fast-moving industry.

Tesla is a great example of the enthusiasm around autonomous vehicles. Despite Elon Musk’s interference in European politics, which played a part in sending new registrations of Teslas down 60% in Germany in January, Tesla is still worth more than $1 trillion.

The stock’s resilience can be attributed not to the hope that Tesla car sales will rebound but to the company’s autonomous vehicle and robotaxi ambitions.

“The autonomous future is here,” Musk said when he unveiled the autonomous Cybercab last year.

UK & Europe

Although much of the action is taking place in China and the United States, several companies are doing very interesting things in the UK and Europe. 

Renault Group is one of WeRide’s European partners with a strategy to launch a Level 4 minibus integrated with WeRide’s technology.

London-based Wayve is developing AI end-to-end foundational models for AVs and has recently launched testing in San Francisco. Their approach has many similarities with WeRide.

AIM-listed Tekcapital is preparing for the IPO of portfolio company Guident which has developed autonomous vehicle safety technology that provides teleoperation functionality to get vehicles out of harms away. 

Another example is UK-based and privately held Evie Autonomous. Evie have produced fully autonomous pods that have been deployed at Heathrow to shuttle passengers and cargo.