Lloyds Banking Group (AO) | Buy | CEO/CFO Digital Tour feedback

Research evidence excerpt

Lloyds Banking Group (AO) | Buy | CEO/CFO Digital Tour feedback

e north star with also the target of sub GPB9.9bn of operating

expenses being reaffirmed.

Nothing particular to be signalled on asset quality, however William did mention that moves in used car prices are creating a bit

of noise on the operating lease depreciation line.

Regarding the growing gap between UK GDP growth and corporate loan growth, William mentioned that corporate loan growth

was partly driven by inflation-led nominal GDP growth, and that, despite the macro headlines, there was quite meaningful

corporate investment concentrated in infrastructure, transition and technology. Lloyds itself is an example of the technology

investment trend, as are many of its clients.

Political environment and regulatory reforms

DTA and Stamp duty reforms to unlock growth are seen are rather unlikely at the moment.

However, reforms on the conduct and prudential sides were seen as positive and more concrete.

On the conduct side. Two concrete examples were cited. First, the FOS regime: under consultation, and seen as most likely to

become reality, is the principle that adherence to FCA regulation means by-default adherence to financial ombudsman

regulation. William called this a big positive shift and a big step forward for the sector. Second, the ongoing discussion on the

longstop date against which complaints can be brought, likewise described as a big step forward

On the prudential side, the most recent example is the ring-fencing change, described as a pretty concrete change that will not

transform things overnight but is directionally and substantively supportive. Importantly, William was explicit that the reform

agenda is being driven by the government, not the regulators.