UBS sees Lloyds as a “buy” with a price target of 60 pence, suggesting a 30% increase from the current price.
All UK banks deserve an upgrade, but none more than () – that’s UBS’s point of view.
Reiterating a buy recommendation, the Swiss bank says Lloyds is the preference in the industry and its forecast is around 15% above market consensus.
“We expect strong growth in deposits; rebound in consumer credit; and rising interest rates will lead to substantial growth in net interest income in the UK over the next two years, which is not factored into the consensus or current valuations, ”said analyst Robert Noble in a note.
UBS’s optimistic note comes as new CEO Charlie Nunn has had his feet under the table for just a few weeks, after taking over from António Horta-Osório in August.
It also comes as UK authorities reflect on potential changes to these banking sector rules that could ease the ‘lockdown’ rules that keep their retail banking activities separate from the rest of their businesses.
UK banks are seen as at a disadvantage by US and EU lenders, where the rules are seen as less stringent.
The cantonment rules were developed in the aftermath of the 2008 credit crunch to protect customer money in the event of bank failure, but were not completed and fully enforced until 2019, when 1.2 trillion dollars Sterling core deposits were secured in ring-fenced banks. .