Lloyds is in a perky mood, with upgraded guidance for the returns it expects to make in 2021 and a reduction in likely impairments. It has also declared a strategic push on the retirement market and bought a platform business to accelerate its capabilities in this space.
This would suggest there could be a new lease of life in the banking group, which has for many years lived under the cloud of PPI claims, competition from challenger banks, and clunky legacy systems.
“The PPI problems are now in the past and many challenger banks are now finding it hard to make a profit, which means Lloyds can stop looking in the rear-view mirror every five minutes and start to think about how it wants to shape its business for the future,” Danni Hewson, financial analyst at AJ Bell.
“It already has a solid position in the current account, mortgage and business banking segments, so the plan is to cater for more of its customers’ financial needs.
“There is increasing pressure on people to be more financially prepared for later in life, and so Lloyds going after the retirement market is a logical step forward. Nonetheless, this is a very competitive space and it’s one thing to declare ambitious growth targets and another to achieve them.
“Charlie Nunn is about to become the bank’s new chief executive and he will provide some fresh thinking in the boardroom just at the point where the backdrop is conducive to making bold strategic moves.
“A key reason behind Lloyds’ upgraded returns guidance is the improved UK macroeconomic outlook. But it needs to be careful not to be too bullish in case there are some nasty bumps in the road for the economic recovery.”