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Lloyds bank

ursaminortaur
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Lloyds bank

#407710

Postby ursaminortaur » April 28th, 2021, 3:19 pm

Lloyds profits soar as it cuts bad debt provisions by £459 million.


https://www.theguardian.com/business/2021/apr/28/lloyds-profits-soar-as-covid-loan-loss-provisions-released

Earnings at Lloyds Banking Group have rebounded, with a forecast-beating £1.9bn in pre-tax profits for the first quarter, as the lender released cash that had been earmarked for potential loan defaults triggered by the pandemic.

The upbeat results came as other European lenders reported strong quarterly trading. Profits at Santander jumped to nearly five times their level last year after the Spanish bank avoided further loan loss charges, while Deutsche Bank recorded its highest quarterly profit since 2014 after a bumper performance by its investment bank.

Lloyds released £459m from a cash pile meant to cover bad debts in the first three months of the year, in stark contrast to the £1.4bn charge it took at the start of the outbreak in 2020. The banking group put aside £4.2bn last year amid fears that business and personal customers would fail to keep up with their loan payments.

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Re: Lloyds bank

#407713

Postby scrumpyjack » April 28th, 2021, 3:28 pm

ursaminortaur wrote:Lloyds profits soar as it cuts bad debt provisions by £459 million.


https://www.theguardian.com/business/2021/apr/28/lloyds-profits-soar-as-covid-loan-loss-provisions-released

Earnings at Lloyds Banking Group have rebounded, with a forecast-beating £1.9bn in pre-tax profits for the first quarter, as the lender released cash that had been earmarked for potential loan defaults triggered by the pandemic.

The upbeat results came as other European lenders reported strong quarterly trading. Profits at Santander jumped to nearly five times their level last year after the Spanish bank avoided further loan loss charges, while Deutsche Bank recorded its highest quarterly profit since 2014 after a bumper performance by its investment bank.

Lloyds released £459m from a cash pile meant to cover bad debts in the first three months of the year, in stark contrast to the £1.4bn charge it took at the start of the outbreak in 2020. The banking group put aside £4.2bn last year amid fears that business and personal customers would fail to keep up with their loan payments.


Not surprisingly the poor old Guardian doesn't understand company accounting. The company does not 'set aside a cash pile' when it makes a provision for a possible bad debt. It simple records a liability for the provision as a charge in the P&L account and a liability in the Balance Sheet (being the double entry). Pity they can't recruit business journalists who actually have some knowledge of business.

ursaminortaur
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Re: Lloyds bank

#407736

Postby ursaminortaur » April 28th, 2021, 4:36 pm

scrumpyjack wrote:
ursaminortaur wrote:Lloyds profits soar as it cuts bad debt provisions by £459 million.


https://www.theguardian.com/business/2021/apr/28/lloyds-profits-soar-as-covid-loan-loss-provisions-released

Earnings at Lloyds Banking Group have rebounded, with a forecast-beating £1.9bn in pre-tax profits for the first quarter, as the lender released cash that had been earmarked for potential loan defaults triggered by the pandemic.

The upbeat results came as other European lenders reported strong quarterly trading. Profits at Santander jumped to nearly five times their level last year after the Spanish bank avoided further loan loss charges, while Deutsche Bank recorded its highest quarterly profit since 2014 after a bumper performance by its investment bank.

Lloyds released £459m from a cash pile meant to cover bad debts in the first three months of the year, in stark contrast to the £1.4bn charge it took at the start of the outbreak in 2020. The banking group put aside £4.2bn last year amid fears that business and personal customers would fail to keep up with their loan payments.


Not surprisingly the poor old Guardian doesn't understand company accounting. The company does not 'set aside a cash pile' when it makes a provision for a possible bad debt. It simple records a liability for the provision as a charge in the P&L account and a liability in the Balance Sheet (being the double entry). Pity they can't recruit business journalists who actually have some knowledge of business.


Maybe you would prefer the FT's take on the same story

https://www.ft.com/content/8cf861e5-b51e-42ac-bbe5-4a569fac1c82

Lloyds Bank profits surge after reversal of loan loss provisions
.
.
.
Lloyds, the UK’s largest retail lender, reported a pre-tax profit of £1.9bn for the three months to March, up from less than £100m in the same period last year.

The improvement was almost entirely because of the drop in bad debt provisions. Lloyds reported a net impairment credit of £323m, compared with a £1.4bn charge in the first quarter of 2020.

Andrew Coombs, analyst at Citi, said there was “the prospect of further releases as the year progresses”, as the bank held on to some extra provisions that were not directly linked to economic forecasts.

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Re: Lloyds bank

#407741

Postby Arborbridge » April 28th, 2021, 4:47 pm

scrumpyjack wrote:
ursaminortaur wrote:Lloyds profits soar as it cuts bad debt provisions by £459 million.


https://www.theguardian.com/business/2021/apr/28/lloyds-profits-soar-as-covid-loan-loss-provisions-released

Earnings at Lloyds Banking Group have rebounded, with a forecast-beating £1.9bn in pre-tax profits for the first quarter, as the lender released cash that had been earmarked for potential loan defaults triggered by the pandemic.

The upbeat results came as other European lenders reported strong quarterly trading. Profits at Santander jumped to nearly five times their level last year after the Spanish bank avoided further loan loss charges, while Deutsche Bank recorded its highest quarterly profit since 2014 after a bumper performance by its investment bank.

Lloyds released £459m from a cash pile meant to cover bad debts in the first three months of the year, in stark contrast to the £1.4bn charge it took at the start of the outbreak in 2020. The banking group put aside £4.2bn last year amid fears that business and personal customers would fail to keep up with their loan payments.


Not surprisingly the poor old Guardian doesn't understand company accounting. The company does not 'set aside a cash pile' when it makes a provision for a possible bad debt. It simple records a liability for the provision as a charge in the P&L account and a liability in the Balance Sheet (being the double entry). Pity they can't recruit business journalists who actually have some knowledge of business.


Well, being generous, maybe they just wanted to put it in a way which would be understood by the mass of their readers - mostly arts graduates and sociology types.

But regardless of the details, as we are always saying - it's all "fungible", so something somewhere is "released" from whatever it was doing previously! :lol:

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Re: Lloyds bank

#407960

Postby GoSeigen » April 29th, 2021, 11:13 am

scrumpyjack wrote:
ursaminortaur wrote:Lloyds profits soar as it cuts bad debt provisions by £459 million.


https://www.theguardian.com/business/2021/apr/28/lloyds-profits-soar-as-covid-loan-loss-provisions-released

Earnings at Lloyds Banking Group have rebounded, with a forecast-beating £1.9bn in pre-tax profits for the first quarter, as the lender released cash that had been earmarked for potential loan defaults triggered by the pandemic.

The upbeat results came as other European lenders reported strong quarterly trading. Profits at Santander jumped to nearly five times their level last year after the Spanish bank avoided further loan loss charges, while Deutsche Bank recorded its highest quarterly profit since 2014 after a bumper performance by its investment bank.

Lloyds released £459m from a cash pile meant to cover bad debts in the first three months of the year, in stark contrast to the £1.4bn charge it took at the start of the outbreak in 2020. The banking group put aside £4.2bn last year amid fears that business and personal customers would fail to keep up with their loan payments.


Not surprisingly the poor old Guardian doesn't understand company accounting. The company does not 'set aside a cash pile' when it makes a provision for a possible bad debt. It simple records a liability for the provision as a charge in the P&L account and a liability in the Balance Sheet (being the double entry). Pity they can't recruit business journalists who actually have some knowledge of business.


Not all its readers are so pedantic. Lloyds actually does have a cash pile, which is undistributable if not in the P&L. So the Guardian's understanding and description of the situation is pretty good. At lease I hope so because as a shareholder I am looking forward to the resulting higher distributions.

Hmm, 1.9bn in quarterly profit from a bank about which this time last year Fools were saying they could not see where any profits would come from...

GS

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Re: Lloyds bank

#407972

Postby dealtn » April 29th, 2021, 11:29 am

GoSeigen wrote:
Not all its readers are so pedantic. Lloyds actually does have a cash pile, which is undistributable if not in the P&L. So the Guardian's understanding and description of the situation is pretty good. At lease I hope so because as a shareholder I am looking forward to the resulting higher distributions.



So which line in its Balance Sheet is this "cash pile" and how has it changed as a result of the reserves release?

It isn't pedantic to point out nonsense, which is a long way from a "pretty good" understanding and description.

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Re: Lloyds bank

#409140

Postby GoSeigen » May 4th, 2021, 5:52 am

dealtn wrote:
GoSeigen wrote:
Not all its readers are so pedantic. Lloyds actually does have a cash pile, which is undistributable if not in the P&L. So the Guardian's understanding and description of the situation is pretty good. At lease I hope so because as a shareholder I am looking forward to the resulting higher distributions.



So which line in its Balance Sheet is this "cash pile" and how has it changed as a result of the reserves release?

It isn't pedantic to point out nonsense, which is a long way from a "pretty good" understanding and description.



Seriously???

Income Statement:
[2020 Full Year] £m
Impairment (4,060)

[2021 Q1 IMS]
Impairment 336


Balance Sheet as at 31 Mar 2021:
[2021 Q1 IMS] £m
Cash and balances at central banks 61,693 [Dec 2020: 49,888; Dec 2019: 38,880]


...and the increased profit feeds directly through to distributable equity of course...

GS

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Re: Lloyds bank

#409143

Postby dealtn » May 4th, 2021, 7:04 am

GoSeigen wrote:
dealtn wrote:
GoSeigen wrote:
Not all its readers are so pedantic. Lloyds actually does have a cash pile, which is undistributable if not in the P&L. So the Guardian's understanding and description of the situation is pretty good. At lease I hope so because as a shareholder I am looking forward to the resulting higher distributions.



So which line in its Balance Sheet is this "cash pile" and how has it changed as a result of the reserves release?

It isn't pedantic to point out nonsense, which is a long way from a "pretty good" understanding and description.



Seriously???

Income Statement:
[2020 Full Year] £m
Impairment (4,060)

[2021 Q1 IMS]
Impairment 336


Balance Sheet as at 31 Mar 2021:
[2021 Q1 IMS] £m
Cash and balances at central banks 61,693 [Dec 2020: 49,888; Dec 2019: 38,880]


...and the increased profit feeds directly through to distributable equity of course...

GS


Seriously!!!

How has the reserves release affected the Cash and balances at central banks line? (It hasn't)

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Re: Lloyds bank

#409191

Postby GoSeigen » May 4th, 2021, 9:29 am

dealtn wrote:
GoSeigen wrote:
dealtn wrote:
So which line in its Balance Sheet is this "cash pile" and how has it changed as a result of the reserves release?

It isn't pedantic to point out nonsense, which is a long way from a "pretty good" understanding and description.



Seriously???

Income Statement:
[2020 Full Year] £m
Impairment (4,060)

[2021 Q1 IMS]
Impairment 336


Balance Sheet as at 31 Mar 2021:
[2021 Q1 IMS] £m
Cash and balances at central banks 61,693 [Dec 2020: 49,888; Dec 2019: 38,880]


...and the increased profit feeds directly through to distributable equity of course...

GS


Seriously!!!

How has the reserves release affected the Cash and balances at central banks line? (It hasn't)


Never claimed it did, I just supported the article's assertion that there was a cash pile, and that impairments being converted to profits rather than losses means more of that cash is distributable to shareholders. [And yes, I do realise the quantum of $336m this quarter is small fry -- the odd % of market cap. Better than further losses though...]

GS

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Re: Lloyds bank

#411854

Postby ReallyVeryFoolish » May 14th, 2021, 10:16 am

Lost my patience this morning with Lloyds Bank shares and sold out. Money will fund a further diversification into an investment trust. Not decided which one just yet.

RVF

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Re: Lloyds bank

#411870

Postby dealtn » May 14th, 2021, 11:09 am

ReallyVeryFoolish wrote:Lost my patience this morning with Lloyds Bank shares and sold out. Money will fund a further diversification into an investment trust. Not decided which one just yet.

RVF


>60% return over the past year. I wish I enjoyed more of that kind of impatience.

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Re: Lloyds bank

#411873

Postby ReallyVeryFoolish » May 14th, 2021, 11:15 am

dealtn wrote:
ReallyVeryFoolish wrote:Lost my patience this morning with Lloyds Bank shares and sold out. Money will fund a further diversification into an investment trust. Not decided which one just yet.

RVF


>60% return over the past year. I wish I enjoyed more of that kind of impatience.

Well done, it's all in the timing. I sold at about a 7% loss.

RVF

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Re: Lloyds bank

#411876

Postby dealtn » May 14th, 2021, 11:19 am

ReallyVeryFoolish wrote:
dealtn wrote:
ReallyVeryFoolish wrote:Lost my patience this morning with Lloyds Bank shares and sold out. Money will fund a further diversification into an investment trust. Not decided which one just yet.

RVF


>60% return over the past year. I wish I enjoyed more of that kind of impatience.

Well done, it's all in the timing. I sold at about a 7% loss.

RVF


To be clear I'm not claiming I have made that return (it's much more complicated with perhaps >100 transactions in Lloyds in my investment lifetime). Just odd to hear a reason of impatience as the reason for selling for any share that has risen in price that much that quickly. I would associate impatience with owning a share that you hoped would rise that had traded sideways for a significant time period - hence losing patience.

I guess I just misinterpreted your meaning that's all, no problem.

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Re: Lloyds bank

#411881

Postby ReallyVeryFoolish » May 14th, 2021, 11:32 am

dealtn wrote:
ReallyVeryFoolish wrote:
dealtn wrote:
>60% return over the past year. I wish I enjoyed more of that kind of impatience.

Well done, it's all in the timing. I sold at about a 7% loss.

RVF


To be clear I'm not claiming I have made that return (it's much more complicated with perhaps >100 transactions in Lloyds in my investment lifetime). Just odd to hear a reason of impatience as the reason for selling for any share that has risen in price that much that quickly. I would associate impatience with owning a share that you hoped would rise that had traded sideways for a significant time period - hence losing patience.

I guess I just misinterpreted your meaning that's all, no problem.

I see, perhaps a little more from me puts it in better context. I bought Lloyds as part of a switch from purely growth investments in part of my portfolio into what I thought was a basket of fairly reliable, decent quality income stocks prior to retirement. Then all hell broke loose and Lloyds became a political and regulatory football along with other UK bank stocks. This time was subject of my thread at the time about my "damaged goods portfolio". My portfolio reshaping has been pretty successful, part of which was switching HSBC to M and G for example and a number of other things. It was a (perhaps understandable) mistake to buy Lloyds in the first place. And probably a bigger mistake to hang on to it hoping for full share price and dividend recovery when the switch from HSBC has been successful. It just hasn't happened. So today, I finally lost patience and sold it. Crystallising about a 7% loss. I am pretty sure I have better prospects away from the entire UK banking sector. But nobody knows the future. 50% chance I am right.

Off topic here but Shell remains a bigger "damaged goods portfolio" holding.

RVF

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Re: Lloyds bank

#411884

Postby Vince » May 14th, 2021, 11:37 am

ReallyVeryFoolish wrote:
dealtn wrote:
ReallyVeryFoolish wrote:Lost my patience this morning with Lloyds Bank shares and sold out. Money will fund a further diversification into an investment trust. Not decided which one just yet.

RVF


>60% return over the past year. I wish I enjoyed more of that kind of impatience.

Well done, it's all in the timing. I sold at about a 7% loss.

RVF


I've been underwater with Lloyds since around 2009, absolute stubbornness, never ending rounds of averaging down, and an unhealthy obsession to break even and not be beaten, keep me invested in what has got to be the most frustrating share anyone has ever had the misfortune of holding outside of going bust, sometimes I find myself wishing it had, the pain would have been immense but much less short lived, it's akin to having tooth ache for the last 12 years.

I'll break even at 60.5p, I'm throwing a party on that day, right after I sell the lot.

Vince

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Re: Lloyds bank

#411889

Postby scrumpyjack » May 14th, 2021, 11:46 am

dealtn wrote:
ReallyVeryFoolish wrote:Lost my patience this morning with Lloyds Bank shares and sold out. Money will fund a further diversification into an investment trust. Not decided which one just yet.

RVF


>60% return over the past year. I wish I enjoyed more of that kind of impatience.


That's the 'dead cat bounce' compared with the price 20 years ago :D

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Re: Lloyds bank

#411891

Postby ReallyVeryFoolish » May 14th, 2021, 11:49 am

Vince wrote:
ReallyVeryFoolish wrote:
dealtn wrote:
>60% return over the past year. I wish I enjoyed more of that kind of impatience.

Well done, it's all in the timing. I sold at about a 7% loss.

RVF


I've been underwater with Lloyds since around 2009, absolute stubbornness, never ending rounds of averaging down, and an unhealthy obsession to break even and not be beaten, keep me invested in what has got to be the most frustrating share anyone has ever had the misfortune of holding outside of going bust, sometimes I find myself wishing it had, the pain would have been immense but much less short lived, it's akin to having tooth ache for the last 12 years.

I'll break even at 60.5p, I'm throwing a party on that day, right after I sell the lot.

Vince

Good luck. Meantime, though I regret ever buying Lloyds, I am happy to take the 7% loss and forget about investing in UK bank shares. On the counter balance, in sold HSBC at a loss but more than made it back on M and G with the bonus of a well covered generous dividend. If I combine my Lloyds and HSBC misadventures, then I am still just about ahead of the game.

If only the same could be said about Shell.......

RVF

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Re: Lloyds bank

#411892

Postby ReallyVeryFoolish » May 14th, 2021, 11:51 am

scrumpyjack wrote:
dealtn wrote:
ReallyVeryFoolish wrote:Lost my patience this morning with Lloyds Bank shares and sold out. Money will fund a further diversification into an investment trust. Not decided which one just yet.

RVF


>60% return over the past year. I wish I enjoyed more of that kind of impatience.


That's the 'dead cat bounce' compared with the price 20 years ago :D

One very, very dead cat, I feel.

RVF

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Re: Lloyds bank

#411977

Postby GoSeigen » May 14th, 2021, 6:57 pm

Vince wrote:
ReallyVeryFoolish wrote:
dealtn wrote:
>60% return over the past year. I wish I enjoyed more of that kind of impatience.

Well done, it's all in the timing. I sold at about a 7% loss.

RVF


I've been underwater with Lloyds since around 2009, absolute stubbornness, never ending rounds of averaging down, and an unhealthy obsession to break even and not be beaten, keep me invested in what has got to be the most frustrating share anyone has ever had the misfortune of holding outside of going bust, sometimes I find myself wishing it had, the pain would have been immense but much less short lived, it's akin to having tooth ache for the last 12 years.

I'll break even at 60.5p, I'm throwing a party on that day, right after I sell the lot.

Vince


Would it not be better just to sell the share when it's overpriced? I love Lloyds. Bought it in the mid 2000's. Sold the lot when they cluelessly announced an increased dividend in Jan(?) 2008 (I thought they should have cancelled the div and done a capital raising) and shorted the hell out of them, closed the shorts Jul 2009. Now have been accumulating them for about 4-5 years. I think they are going to be a wonderful wonderful investment.

GS

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Re: Lloyds bank

#413220

Postby Vince » May 19th, 2021, 1:52 pm

GoSeigen wrote:
Vince wrote:
ReallyVeryFoolish wrote:Well done, it's all in the timing. I sold at about a 7% loss.

RVF


I've been underwater with Lloyds since around 2009, absolute stubbornness, never ending rounds of averaging down, and an unhealthy obsession to break even and not be beaten, keep me invested in what has got to be the most frustrating share anyone has ever had the misfortune of holding outside of going bust, sometimes I find myself wishing it had, the pain would have been immense but much less short lived, it's akin to having tooth ache for the last 12 years.

I'll break even at 60.5p, I'm throwing a party on that day, right after I sell the lot.

Vince


Would it not be better just to sell the share when it's overpriced? I love Lloyds. Bought it in the mid 2000's. Sold the lot when they cluelessly announced an increased dividend in Jan(?) 2008 (I thought they should have cancelled the div and done a capital raising) and shorted the hell out of them, closed the shorts Jul 2009. Now have been accumulating them for about 4-5 years. I think they are going to be a wonderful wonderful investment.

GS


That's the trouble with Lloyds, it never seems to be overpriced, it appears to suffer disproportionately to every negative sentiment, Mr. Horta didn't help, he loved giving away billions, some would say it was the right thing to do, but from a shareholder perspective, it never seemed that way. As far as being a wonderful investment, that entirely depends on timing, mine unfortunately, has been extremely unfortunate, however, I'm currently the holder of over 160000 of these money pits, started with 6000, and have ploughed many thousands into trying to get out of the hole I found myself, every time I appeared to be within grasp of dragging myself out of the tar pit that has been Lloyds, someone or something has been standing at the ledge, firmly stamping on my bloodied fingers and kicking me back down into the depths of despair. Jam tomorrow I hear you say, I've seen many fruity days on the horizon, but they all, so far, have been a cruel mirage of £ signs never within touching distance. The small dividend coming next week will keep the lights on for a few months, but the Yacht will have to wait for a year or two more, as is ever with the Black Horse, it runs like the wind, but never in my direction.

Keep the faith

Vince


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