Home Business NewsBusinessBanking News Lloyds beats expectations and helps drive up the FTSE alongside WPP

Lloyds beats expectations and helps drive up the FTSE alongside WPP

by LLB Editor
28th Apr 21 11:23 am

The market has been pricing in a brighter outlook for Lloyds and the bank has certainly delivered some impressive numbers in its first quarter update.

Net interest margin is better than expected, being the difference between what it earns from interest charged on loans and interest paid on savings deposits. Costs are also better than expected, which might come as a surprise given how difficult it is to streamline a business the size and complexity as Lloyds.

“Under the circumstances, outgoing chief executive António Horta-Osório should be very pleased that he is signing off with such a positive update, considering the outcome could have been a lot worse,” says Russ Mould, investment director at AJ Bell.

“Going forward, Lloyds is suggesting it can earn better returns, further cut costs, and pay higher dividends. That message will go down well with the market and go some way to helping to win back investors’ favour after a long period of being a disappointment.”

The banking sector gave a welcome lift to equities in the UK and mainland Europe, driven by results from Lloyds and Deutsche Bank. The FTSE 100 rose 0.4% to 6,973, also helped by a strong update from media agency WPP which is a natural candidate to benefit from easing of lockdown measures. Economic recovery around the world will give companies confidence to increase advertising activities.

“Sainsbury’s was the biggest faller on the FTSE after taking a big hit from Covid-related costs. Supermarkets have done a stellar job of keeping their shelves stocked during the pandemic and expanding online capacity, but this hard work is not translating into a sharp rise in profit as some people might have expected.

“India’s BSE Sensex index jumped for a third day in a rose, up a further 1.5%, despite a brutal second wave of Covid hitting the country. Investors remained optimistic that India will get the crisis under control and snapped up stocks in the finance and auto sectors.”

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