Lloyds to be best capitalised bank in the UK says JP Morgan
Lloyds is to be the best capitalized bank in the UK by 2015 according to JP Morgan. Capital progress will be helped by deferred tax assets (DTAs), considering that Lloyds is number one in the UK for negative capital deductions from DTAs.
The bank restates its preference for Lloyds over RBS and following its down grade of HSBC, sees UK domestics as increasingly attractive. Raul Sinha, analyst, JP Morgan:
A B3 CT1 of 13.4% allowing its 6% ‘15E div yield to be supplemented by further capital return. Our increased price target offers 12% potential upside and although at 1.2x P/TNAV ‘15E the shares appear to offer limited value, Lloyds offers the best capital return prospects ahead of HSBC in the UK in our view.
JP Morgan believe that Lloyds will be able to restart dividends this year. Lloyds shares are unchanged in early trading.
