Lloyds Banking: Hold Rating Amid Mixed Financial Signals and Cost Concerns

Perlie Mong, an analyst from Bank of America Securities, maintained the Hold rating on Lloyds Banking (LLOY – Research Report). The associated price target was raised to p70.00.

Perlie Mong has given his Hold rating due to a combination of factors impacting Lloyds Banking’s financial performance. The company’s underlying profit before tax (PBT) fell short of market expectations by 4%, primarily due to higher operating costs and impairments. The operating costs exceeded forecasts by 4%, largely because of severance and investment expenses. Additionally, there was an impairment miss driven by a charge related to multiple economic scenarios, including potential tariff risks.
Despite these challenges, Lloyds Banking showed healthy volume growth with lending and deposits increasing in the quarter. However, the bank’s risk-weighted assets (RWA) were higher than expected, attributed to temporary hedging activities. The management did not revise its 2025 guidance, indicating stability in its long-term outlook. Given these mixed signals, Perlie Mong’s Hold rating reflects a cautious stance, balancing the company’s growth prospects with its cost and impairment concerns.

According to TipRanks, Mong is an analyst with an average return of -5.6% and a 42.86% success rate.