Lloyds Banking Group PLC and other UK banks “still offer upside” says
New Lloyds boss Charlie Nunn’s upcoming strategy day “could see higher cost guidance”
Lloyds Banking Group PLC (LSE:LLOY) and NatWest Group PLC (LSE:NWG) continue to offer upside despite the interest rate-driven rally in recent weeks, analysts at Barclays (which also happens to be a UK bank) said in a note on Friday.
Upside for UK banks is seen as being driven by “an underappreciated EPS tailwind from low deposit betas”.
On Lloyds, the analysts said new boss Charlie Nunn’s upcoming strategy day “could see higher cost guidance” but they believe rising market expectations “should limit downside”.
The key issues are whether Lloyds can convince the market about higher OOI (other operating income) “and cap returns”, the Barclays number crunchers added.
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