About Lloyds Banking
Lloyds Banking Group is a British retail and commercial financial services provider, with locations across the UK. Its origins can be traced back to 1765 and the founding of Taylors & Lloyds by John Taylor, Sampson Lloyd, and their two sons in Birmingham. The original bank became a prominent financier for trade and industry in Birmingham.
In 1852, the bank changed its name to Lloyds & Company after John Taylor’s son James died. Then, in 1865, it shed its private bank heritage to become a joint-stock company with a board of directors, resulting in another name change to Lloyds Banking Company Limited.
Over the course of the next hundred years, and through multiple acquisitions, mergers and demergers, the company has become one of the UK’s leading high-street banks, with 738 branches across the UK. Its headquarters are located at 25 Gresham Street in the City of London, with its registered office on The Mound in Edinburgh.
What does the company offer?
The company offers retail and commercial banking products through its high-street locations, telephone banking, and online platforms. These include current accounts, ISAs, credit cards, loans, savings accounts, wealth management services, and overseas money transfers.
Commercial banking products are aimed at small and medium-sized enterprises (SMEs), mid-market companies, and the major UK and multinational corporate and financial institutions.
The company is currently the largest mortgage lender in the UK, providing nearly a quarter of home loans. It is also one of the country’s largest insurers, offering a wide range of services including life insurance, pensions, investment products, insurance underwriting, and broking.
Lloyds Banking Group is one of the UK’s biggest financial services organisations. It has more than 25 million customers, making it the largest retail bank in the UK. Around 17.4 million of these customers make use of the group’s online banking platforms, which is a 39% increase from 2016’s 12.5 million online users.
The company is also one of the UK’s largest private sector employers, with more than 61,000 staff. However, this number is down substantially from the high of 2009 when the group had over 100,000 employees.
Lloyds stock overview
Lloyds is one of the largest companies to float on the London Stock Exchange (LSE), where it is a constituent of the FTSE 100 index under the ticker symbol LLOY. It has a secondary listing on the New York Stock Exchange (NYSE).
The LLOY share price has seen massive fluctuations since its inception by acquiring, merging with, and splitting from some of the largest and best-known high-street banks.
In 2001, amid a period of consolidation within the banking sector, Halifax Building Society agreed to a £10.8bn merger with the Bank of Scotland. This merger formed HBOS, which became a subsidiary of the company when HBOS was acquired by Lloyds TSB in January 2009. Other large acquisitions include Scottish Widows, which demutualised to become part of the Lloyds TSB Group in 2000, and Chartered Trust, which Lloyds TSB purchased from Standard Chartered Bank, also in 2000.
In the early 1990s, the Lloyds share price experienced steady growth until 1992, when a rapid increase in its value began. In 1995, the shares soared to 485.42p, up from 68.95p in 1990, as the company merged with TSB to create Lloyds TSB Group. However, the group’s stock declined sharply amid the 2008 financial crisis.
After the financial crisis of 2008, the UK government bailed out several large banking groups, including RBS, HBOS, and Lloyd’s TSB. After Lloyds TSB acquired HBOS in 2009, the British government owned a 43% stake in the group. As a result of the government bailout, Lloyds was forced to split off TSB as a separate company in 2013.
Also in 2013, the UK government began selling its Lloyds shares, after the bank repaid the government the £20.3bn it owed. This left the government with only a 2% stake in the company. In 2017, the UK government sold its remaining shares in the company, fully returning the banking giant to private ownership.
Is Lloyds a penny stock?
While the company may be considered a penny stock because it trades at under £1 per share, in other respects it breaks the mould of a typical penny stock.
The term ‘penny stocks’ generally refers to shares in small companies that trade for less than £1 in the UK, or less than $5 in the US. These companies tend to have small market capitalisations and low levels of liquidity, and their shares typically trade over the counter (OTC). Penny stocks are also considered to be higher-risk investments, due to the speculative nature of investing in small-cap companies geared for growth.
LLOY stock is different because it is an established, London-listed company with one of the largest market caps in the UK, and it has a strong liquidity profile. The company’s share price meets one of the criteria of a penny stock, but that’s where the similarities to most other penny stocks end.
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