This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Lloyds Banking Group (LLOY) Retail Shareholder Event 14 June 2019

Carla Antunes da Silva, Executive Committee member and Group Strategy, Corporate Ventures and Investors Relations Director and Douglas Radcliffe, Group Investor Relations Director presented to 40 retail shareholders in a highly successful event organised by Lloyds and ShareSoc.

After a detailed 45 minute presentation, Carla and Douglas answered questions for 30 minutes, followed by informal discussions and networking over a very pleasant buffet lunch on the 8th floor of the Lloyds head office in Gresham Street overlooking the London skyline.

Copies of the presentation slides are here. Lloyds 2019_sharesoc_presentation_final  The key points I noted were:

  • Lloyds is now a simple, low risk, customer focused, UK retail and commercial bank and as part of its current strategic phase is making a more than £3bn investment to transform the Group for success in a digital world. Lloyds has around 26 million customers, and with 15.7 million digitally active customers, UK’s largest digital bank.
  • The new JV with Schroders will target the mass affluent-affluent customer segment (£100k + investable cash) and the High Net Worth Customers (£1m + investable cash) via Cazenove Capital. They see this as a big growth opportunity.
  • They are multi brand and multi channel (in this respect they are not simple!)
  • They are very focused on costs and cost income ratio (see slide re benchmarking).
  • Guidance on NIM, costs, credit quality, profitability and capital build was reiterated at Q1 (see the slides). The regulator has recently reduced their capital requirement and this may allow more to be distributed to shareholders.

There were lots of questions covering a wide range of topics.

  • On the role of Scottish Widows within the Lloyds Banking Group, Lloyds indicated it was an important and integral part of the Group and there were no plans to sell it.
  • On questions around share buy backs (to which a number of questioners were critical, preferring dividends), Lloyds said that a large number of institutional investor prefer buybacks to special dividends, including the US funds who hold c. 30% of shares. Lloyds also explained the benefits of buybacks such as the reduction in the number of shares and the value of the company thus being split among a smaller number of shares.
  • On the lengthy annual report and 100+ pages of notes, making it more difficult to see the key messages, Lloyds pointed out their regulatory reporting requirements but also highlighted that they have reduced the length of their releases.
  • On the preference for more of the presentation to be on the outlook and less on products and services offered to customers, Lloyds noted the feedback for future presentations.
  • On customers service, although there was one critical questioner, several others in the audience thought Lloyds and its many brands were good. Lloyds noted their strong customer satisfaction scores.
  • On the impact of interest rates Lloyds gave a sensitivity (25bp = +- c. £85m, optimum base rate is around 2.5% to 3%) and talked about their current planning assumption of one rise of 25bp per year over planning horizon of c. 3 years though a rate rise is now unlikely this year.
  • On questions around Brexit operational impact Lloyds noted the operational impact is small as the Group is mainly UK focussed. However, any impact of Brexit on the UK economy will impact the Group and potentially loan loss ratios and profits.
  • HBOS acquisition and rights issue. Can I have my money back? The question was neatly pivoted to say that PPI claims are now nearly finished. The impact has been huge, but further impact is limited given date for final submission of claims is set. Note from Cliff: the Lloyds Shareholder Action group is now closed to new joiners, so there is no redress available for the questioner or others in the same position who lost money.

There were no questions on the treatment of SMEs, directors’ remuneration or succession, which suggests these are not a priority for this group of investors.

After the Q&A, a buffet lunch was served with sandwiches, very nice hot sausage rolls and fresh fruit. Carla, Douglas and other executives mingled with the audience and answered further questions.

Lloyds have run retail shareholder events in the past but not recently. In a 1:1 over lunch, Douglas said that although they have not recently hosted retail events they are keen to find right formats for engagement with retail investors. I stressed to him that this sort of long term commitment and hard work results in building trust between shareholders and the company. Being prepared to allocate time for these events provides an insight into the corporate governance of the company and provides reassurance that one’s investment will be well looked after. Lloyds could become a role model for other UK companies to follow.

ShareSoc hope to be able to do more of these large company events. We think this will be of interest to many members and complement the ShareSoc growth company investor events which tend to focus on smaller companies.

My personal conclusion (I am not authorised to give advice) is that shareholders can expect good dividends, probably buy-backs and good capital discipline. The lessons of wasting money on acquisitions appear to have been learned. Brexit might be a hiccup and were it not for that the shares appear to be excellent value at 57p with 2018 eps of 5.5p

And finally, here is a picture of some of the happy attendees at lunch with ongoing discussions in the background.


Cliff Weight, Director, ShareSoc

Declaration: I own shares in Lloyds.


  1. John Smith says:

    I recently read about LLoyd where it was mentioned that the Net Interest Income in Q1 of FY2019 decreased by 3% to £3,083 mn. It ranks among the large-cap stock listed on the London Stock Exchange and a constituent of FTSE 100 index as well. I guess that this large cap stock will show the same graph as of now.

  2. Stephen Burke says:

    I didn’t go to this as it wasn’t convenient but I’d like to encourage sharesoc to do more events with this kind of company if they can be persuaded to engage; I’m not really interested in the likes of tiny mining or tech companies that tend to feature in seminars (not just sharesoc ones).

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