The share price of Lloyds Bank continued to rise as investors responded to recent US bank results and traders focused their attention on its future earnings. The share price was at 101.65p and up 75% from the lowest point in April of last year.
Lloyds Bank will publish its results in this week
This month, the Lloyds Bank share price stayed above 100p as American banks announced their results showing that they continued to do well.
This week the company is expected to publish their financial results, which includes more details about the quarter as well as the entire year.
Analysts expect a good performance from its business in the fourth quarter as UK’s economy stabilises.
Net interest revenue is forecast to increase from PS3.451billion in the last year, to PS3.54billion in this one. Other income including ATM fees, Wealth Management, Service Charges, and Rent from Owned Properties continued to rise, reaching PS1.55 Billion.
These estimates indicate that the net interest (NIM), for this year, will reach PS13,648 billion. This is up from PS12,84 billion one year ago. Other income is expected to be PS6.08billion, up from PS5.5billion a year ago.
According to the consensus report, its annual profit has risen to PS4.57billion.
Lloyds Bank consensus | Source: LLOY
Lloyds has, along with other European banks, benefited from relatively high interest rate in the UK, as the inflation level has been elevated.
Analysts in the city believe the Bank of England is likely to keep rates high for a longer period of time, as UK inflation has been much higher than its target of 2.0%. Recent data shows that Consumer Price Index rose by 3.4% for December.
The company also benefits from cost-cutting initiatives, such as the increased use of digital banking technologies. Analysts at City believe the ratio of cost to income dropped from 68.4% in the third quarter to 59.6% during the fourth. The cost-income ratio is predicted to continue to decline, from 60.4% to 47.2% by FY’28.
The asset quality ratio will also continue to rise, from 0.1% to 0.27% by FY’28. In the future, the company is expected to continue to increase its shareholder returns. The dividends per share will go from 3.17p to 5.77p. Share buybacks are expected to increase from PS1.7 billion to PS3 billion by 2027.
Lloyds’s shares will also be affected by the falling costs of remediation, as these are projected to drop to PS1 billion from PS899 millions in 2024. The motor insurance crisis will cause these costs. The cost will continue to fall until 2028, when it will reach PS248 millions.
Technical analysis of Lloyds Share Price
Source: TradingView
Charts of the daily timeframe show that Lloyds shares have been on a steady upward trend for the last few months, and are now at their highest levels since 2008. The chart has formed a channel ascending and now is hovering at its upper edge.
Both lines of the Percentage Price Oscillator formed a bearish cross-over pattern. The Relative Strength Index has also pointed down.
If this happens, then the next key level to watch will be 95p. This is the lower side of the ascending channel. The next important level is 95p. This is the bottom of the ascending channel.
This article Lloyds shares price analysis and earnings forecast: Is it a sell or buy? This post may change as new information becomes available
