Surprised its down 4% ;-(

Seems analysts are not happy with the pre-tax profit figure, which has fallen short of the estimates.

Yes not too clever atm.

Investec Buy 73.93 86.00 86.00 Reiterates

Nomura note:
"Investment case from here -Lloyds has missed consensus largely owing to weaker other operating income (OOI) driven by insurance and commercial banking. Reported NIMs came in better than expected at 264bp in the quarter and in line with our expectations. However, average interest earnings assets (AIEA) continues to be lower than expected despite customer loans increasing, which suggests underlying margin pressures.
Looking into 2016 we expect to see revenue downgrades to the tune of GBP 400m-500m mainly owing to OOI. However, cost control was strong in the quarter and asset quality continues to surprise, so most of this revenue downgrade will be offset. Longer term estimates might see more of an impact as consensus will look to normalise cost of risk, rather than pass on the 3Q beat.
Lloyd’s investment case is driven by its potential dividend yield. With distributable underlying earnings yield (including DTAs) at c12%, our longterm expectation remains that Lloyds will deliver a top decile dividend yield from current valuation in the long run. In this context, PPI costs falling to GBP 0.6bn in 3Q14 from a 1H15 level of GBP 1.7bn will be seen as a positive. CET1 ratio improved 40bp in the quarter to 13.7%. While weaker than our expectation, it still underpins our 3.25p distribution expectation for the year against consensus of 2.6p. We would find this a particularly good buying opportunity on any weakness.
Key points from the results
• NII came in at GBP 2,863m against consensus of GBP 2,937m. Reported NIMs were better than expected at 9M15 level of 263bp or 3Q15 level of 264bp. However, AIEA fell 1% to GBP 438.7bn, while customer loans
grew 0.7% to GBP 455bn, so the denominator has helped report better NIMs.
• Other operating income was the main source of weakness coming in at GBP 1,374m against consensus of GBP 1,622m. The weakness is driven by non-repeat of bulk annuity income and weak OOI in commercial
banking. This will be the main source of revenue downgrade looking into 2016-17.
• Cost control was evident in the quarter, coming in at GBP 2,108m against consensus of GBP 2,240m, offsetting some of the revenue downgrades.
• Cost of risk came in better at GBP 157m against consensus of GBP 225m.
• CET1 at 13.7% is among best in the sector (ex Scandi) and will underpin our above consensus 3.25p distribution expectation (consensus at 2.6p). TBV grew by 2.8% to 55p."

Still dropping.......sub 72p looking likely.

Deutsche Bank retains buy on Lloyds Banking Group, target cut from 96p to 91p.

Share price also suffering from more selling by HMG yesterday!

And the other Brokers.

Barclays Capital Overweight 73.19 105.00 105.00 Retains

Societe Generale Buy 73.19 100.00 98.00 Reiterates

JP Morgan Cazenove Overweight 73.19 105.00 98.00 Reiterates

Berenberg Sell 73.19 55.00 55.00 Reiterates

No UKFI selling today with shares below 73.6p...all down to the computers now

I didn't see the HMG sale yesterday. What %age is still remaining with them?

Harry - 9.89%

Thanks. Still a way to go then. It seems that HMG are going to constantly sell at c78p level, so until they are out completely the upside is going to be limited.

On the way up again.....ready for HMG to dump some more!

Not the best choice, since I bought yday!!!

Not a great day for lots of stocks. I bought at 72.4p and am happy to wait until it gets to 77.5p.....i.e. just before HMG knocks the sp back down again!

What spooked the banks today ?

PRA Stress Test Thresholds Comfortably Exceeded

LLOYDS BANKING GROUP COMFORTABLY EXCEEDS PRA STRESS TEST THRESHOLDS

Lloyds Banking Group plc (the Group), together with six other financial institutions in the UK, has been subject to the 2015 stress test conducted by the Prudential Regulation Authority (PRA).

The test assesses banks' capital adequacy against a 4.5 per cent Common Equity Tier 1 (CET1) capital threshold and a 3 per cent Tier 1 Leverage threshold. While the focus of this year's stress test was primarily on emerging markets and trading operations, it also reflected a material shock to UK corporates and households as well as a more severe view of conduct provisions. The key assumptions impacting the Group's operations included the more severe view of conduct provisions, unemployment peaking at 9.2 per cent and UK house and commercial property prices falling 20 per cent and 30 per cent respectively.

Result of stress test
The Group comfortably exceeds the capital and leverage thresholds set out for the purpose of the stress test and is therefore not required to take any action as a result of this stress test.

In the trough of the stress, the PRA calculated the Group's estimated CET1 ratio as 9.5 per cent and its leverage ratio as 3.9 per cent, compared with a reported CET1 ratio of 12.8 per cent and leverage ratio of 4.9 per cent as at 31 December 2014.

Group Chief Executive, António Horta-Osório said:
"We are pleased to have comfortably exceeded the thresholds under this year's PRA stress test. These strong results, which again reflect a material stress to the UK economy, demonstrate the progress we have made in de-risking our balance sheet as well as the Group's strong capital position and capital-generative business model."

The change in the CET1 ratio in the stress, as calculated by the PRA, of 3.3 per cent primarily reflects the more severe view of conduct charges as well as the impact of increased impairments. In the first nine months of 2015 the Group has already recognised conduct charges of £2.4 billion, equating to over 1.0 per cent of CET1 capital. In addition the Group has indicated that if reactive PPI complaint volumes remained at the same level as the first half of 2015 it would have to increase the provision by an additional £2.5 billion, equating to approximately a further 1.0 per cent of CET1 capital, in the 15 months to the end of 2016.

Under the stress scenario it is assumed that the payment of dividends would cease. Given the Group's strong capital position it did not submit any additional management actions for PRA consideration. In practice, the Group would take such management actions to mitigate the impact of a severe stress in order to protect its capital position. As a result of the Group's strong capital base none of its convertible capital securities1, including its Additional Tier 1 (AT1) instruments, converted into equity in the stress test.



The Group continues to make further significant progress in strengthening its capital position. In the first nine months of 2015 the Group's CET1 ratio increased by 0.9 per cent (or by 1.1 per cent excluding the dividend announced with the half year results) to 13.7 per cent, driven by underlying earnings growth and the further de-risking of the balance sheet. The Group continues to expect to generate 1.5 - 2.0 per cent of CET1 per year before dividends and, while capital rules are still evolving, continues to target a steady state CET1 ratio of around 12 per cent plus an amount broadly equivalent to a further year's ordinary dividend.

Further details
Details of the PRA approach to the stress test and the detailed results in relation to all participating banks are available from the PRA website.


- END -

Lovely! Nicely in profit and ready to sell before HMG!!!

Lloyds makes list of top tips for 2016

Early days yet I know, but if weakness persists into 2016 I wonder if the £2B sale will go ahead.
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