Lloyds shares tumble as profit growth hits a wall
Britain’s Lloyds Banking Group faces a housing market chill, the risk of loan defaults and the end of the interest rate party facing the banking sector.
Lloyds shares fall
We're looking at Lloyds Banking Group PLC shares because they are falling some 2% early in the session. It's one of the top percentage losers on the FTSE. Let's take a look at Lloyd's chart here. As you can see there, plenty of movement around the session today, red candlestick there and a lot of volume, just showing you the MACD there, as well.
EPS
Now, Lloyd's is an interesting one because its EPS growth is 14.9% compared to NatWest Group PLC, which is 17.8%. HSBC Holdings PLC (LSE) up there against the peers with a whopping 54.3%. Still, Lloyd's is tanking because it could be down to its sobering results. First, its annual profit for 2022 was flat. The pretax profit figure for the full year totaling £6.9 billion. The positive impact that banks have been enjoying from the higher interest rate environment is being offset by mounting bad loan provisions.
Share buybacks
Lloyd's is also going to pay 1.6p per share, a final dividend and a share buyback of up to £2 billion. This will take total shareholder returns for 2022, up to £3.6 billion. But get this, Lloyds has set aside £1.5 billion to cover troubled loans in 2022 and we haven't even seen the impact of the headwinds in 2023 yet.
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