Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

Lloyds share price: outlook improves along with UK economy

Lloyds share price: Lloyds logo on a mobile screen

Lloyds Banking Group followed yesterday’s positive numbers from Barclays with a similarly positive half-year update, and shareholders will be hoping the upbeat half-year numbers will nudge the Lloyds share price higher. 

The FTSE 100 bank recorded statutory pre-tax profits of £2bn for Q2, elevating profits in the first half to £3.9bn, which is well above expectations. The bank also announced the acquisition of savings and pensions firm Embark Group, for £390m.

The bank also released another £333m from loan loss reserves, on top of the £323m in Q1, taking the total in the first half to £656m. The performance of the underlying business also saw improvements as net interest margin rose to 2.51%. In Q1, Lloyds said they expected NIM to be more than 245 basis points, up from 240 at the end of the previous quarter, so today’s upgrade to 250bps for the rest of the year is very welcome, although it’s still below last year’s 2.59%

Will mortage increase help Lloyds share price?

On the customer side, mortgages saw an increase of £7.5bn to £447.bn in the first half, while deposits also grew to £474.4bn, a rise of £23.7bn.

In terms of the wider economy, the loan book structure saw declines over the quarter in SME and corporate lending, suggesting that while consumers appear to be spending again, businesses are a little bit more reluctant to open the purse strings. Hopefully that will change as infection rates fall further and the economy continues its reopening process.

This is probably where government policy could well play a part, however that would need to assume the government has a clear plan in terms of business policy. Evidence seen thus far would suggest it doesn’t.   

Lloyds confirms dividend payment

Lloyds also confirmed it would pay a 0.67p dividend and, although the bank saw a rise in costs, the improvement seen in margins looks set to more than compensate as the bank upgraded its outlook for the year.

It remains to be seen whether this morning's results will give the Lloyds share price a meaningful lift.

Background image

How to trade the financial markets

A guide to spread betting and trading CFDs, with examples of different trading strategies and an introduction to the three pillars of trading.

get this free report
Mobile trading app

Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.