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Is Lloyds Bank About to Re-Instate Its Dividend?

Over the last 7 years Lloyds Banking Group has had a tortuous time since swallowing up the poison pill that turned out to be HBOS, and having to endure the indignity of a government bailout.

In all that time, the firm has been at the epicentre of a number of banking sector scandals including PPI mis-selling, forex and Libor rigging.

At its six month trading update last year, the bank announced another £1.1bn provision for legacy issues, PPI, Libor and other potential fines for FX price rigging, bringing the total set aside over the past few years to in excess of £10bn.

The bank also announced another 9,000 job losses and the closure of 200 branches as it sought to streamline the business along a more digital model as customers adopt a more on line approach to their banking requirements, bringing the number of job losses over the past seven years to over 50,000.

With the advent of the internet and the increasing use of mobile devices, the requirement for customers to go into an actual branch has made modern banking an increasingly faceless process, as customers pay for goods and services using credit or debit cards, mobile applications or use contactless payment.Spread Betting on the UK Banking Sector

Profits Expected to Rise after Staff Cuts

It is hoped that this week’s full year results will mark a significant milestone in the banks recovery story with the hope that the Prudential Regulation Authority will allow the resumption of a dividend, with subsequent dividends thereafter.

We’ve already seen the UK government further pare down its stake in the bailed out lender this week from 25% to 24%, and markets are also likely to be looking for further signs that Lloyds will reduce its stake in the recently spun off TSB.

In 2013, the bank reported a small pre-tax profit of £415m, for the first time in three years, while this week’s numbers are expected to be much better, with the hope that we could get a resumption of the dividend.

Expectations are for a decline in revenues from £37.9bn to £18.7bn, but pre-tax profits are expected to rise to £6.6bn, which if they come in as expected should signal a dividend of 1p per share.

If this is approved it is likely to rise quite quickly in the coming years and the recent rise in the share price over the last two weeks appears to suggest that the market thinks the dividend approval is coming.

The bank still needs to do more given that it remains one of the most complained about banks in terms of customer service.

However, as long as the UK economy remains on an even keel and there is no further political interference, then the prognosis remains positive while we remain above the 70p level which has acted as a floor for the share price for the last 18 months.

Spread Betting & CFD trading carry a high level of risk to your capital and you can lose more than your initial deposit. Only speculate with money that you can afford to lose. These trading products may not be suitable for all investors so seek independent advice.

Content by Michael Hewson of CMC Markets

The contents on CleanFinancial.com including any articles or videos are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice or form the basis of an of investment decision.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

Content provided by CMC Markets. CMC Markets UK plc and CMC Spreadbet plc are authorised and regulated by the Financial Conduct Authority in the UK, registered offices, 133 Houndsditch, London, EC3A 7BX.

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Canadian Dollar Follows Oil Lower Ahead of Central Bank Speeches

With a slew of key central bank comments due this week, Michael Hewson takes another look at the impact of monetary policy expectations on several major currency pairs.

  • Comments from the heads of four central banks: Bank of England, Federal Reserve, European Central Bank and the Bank of Canada
  • Sterling/Dollar is still looking biased towards the topside, with a short-to-medium term target of $1.5480
  • Weakness in the price of crude oil has helped the US Dollar/Canadian Dollar pair rebound towards C$1.28

 

Spread Betting & CFD trading carry a high level of risk to your capital and you can lose more than your initial deposit. Only speculate with money that you can afford to lose. These trading products may not be suitable for all investors so seek independent advice.

Video content by Michael Hewson of CMC Markets

The contents on CleanFinancial.com including any articles or videos are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice or form the basis of an of investment decision.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

Content provided by CMC Markets. CMC Markets UK plc and CMC Spreadbet plc are authorised and regulated by the Financial Conduct Authority in the UK, registered offices, 133 Houndsditch, London, EC3A 7BX.

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Can the Pound Rally Despite Record Low UK Inflation Data?

With UK CPI hitting a record low but core prices rising, Michael Hewson suggests that this feeds into the recent narrative from the Bank of England and the possibility of a stronger pound.

  • Despite Greek debt talks remaining acrimonious, the ECB remains unlikely to cut Greece off from the ELA, which points to the euro remaining within its range until a deal comes out
  • GBP/USD may be building a base, with a rising trendline coming in around $1.5320, though a bullish reversal may threaten the move higher
  • Brent crude has seen a significant rebound, with positive candlestick patterns pointing to a reluctance to hold short positions
  • USD/CAD has seen the potential for a topping formation, with strength in the oil markets suggesting that a break below $1.2350 could inspire a sharp pullback

 

Spread Betting & CFD trading carry a high level of risk to your capital and you can lose more than your initial deposit. Only speculate with money that you can afford to lose. These trading products may not be suitable for all investors so seek independent advice.

Video content by Michael Hewson of CMC Markets

The contents on CleanFinancial.com including any articles or videos are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice or form the basis of an of investment decision.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

Content provided by CMC Markets. CMC Markets UK plc and CMC Spreadbet plc are authorised and regulated by the Financial Conduct Authority in the UK, registered offices, 133 Houndsditch, London, EC3A 7BX.

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EUR/GBP Drifts Lower Ahead of Key Eurogroup Meeting

The outcome of this week’s Eurogroup meeting will be key for the euro as Greece remains front and centre of traders’ thoughts, with Michael Hewson discussing the outlook for the single currency.

  • The FTSE 100 may be seeing a diamond formation, with resistance at 6900 that will require a significant catalyst to target 7000
  • EUR/GBP is ‘stair-casing’ lower and may look for an impulse move towards £0.7350 on any break below £0.74
  • The euro is seeing a rising triangle consolidation against the yen but needs to remain above its trendline in order to break higher

 

Spread Betting & CFD trading carry a high level of risk to your capital and you can lose more than your initial deposit. Only speculate with money that you can afford to lose. These trading products may not be suitable for all investors so seek independent advice.

Video content by Michael Hewson of CMC Markets

The contents on CleanFinancial.com including any articles or videos are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice or form the basis of an of investment decision.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

Content provided by CMC Markets. CMC Markets UK plc and CMC Spreadbet plc are authorised and regulated by the Financial Conduct Authority in the UK, registered offices, 133 Houndsditch, London, EC3A 7BX.

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Spread Traders See No Clear Winners for the UK General Election 2015

With the election less than 100 days away, the recent TV debate debacle is playing into Cameron’s hands.

The inclusion of the Greens would not only give a platform to the party most likely to steal votes from Labour, but it also dilutes the potent Farage brand by giving him less screen time to further raid the Tory’s voter baseline.

In the eventuality that all these parties do take part there could be anything between 5 to 11 leaders on stage.

Cameron could easily paint a picture of the chaotic alternative to Tory ‘stability’ that the Conservatives are trying to use as their trump card in this election.

Already there have been plenty of our clients buying Tory seats at a spread of 279-285 as their message strikes a chord with voters.UK Spread Betting

UKIP Fly Refuses to Stop Buzzing the Conservatives

If Cameron is trying to engineer the TV debates to minimize the impact of UKIP, it is for good reason.

Focus has recently shifted onto immigration, a tricky issue that requires nuance and delicacy to handle, something rhetoric heavy election campaigns aren’t exactly known for.

Worryingly for the main two parties, it appears at the moment that nothing can derail this UKIP train.

Despite unpleasant scandal after unpleasant scandal, the party comes out unscathed largely because support is based around the ‘charisma’ of Nigel Farage rather nameable political figures or even policies.

All too often painted as a clown atop a clownish party, the main parties need to take the threat of Farage and UKIP seriously if they are to combat the right-wing upstarts.

There has already been a big movement towards buying UKIP seats, at a spread of 6.5-8.5, as their campaign shows no signs of slowing down.

Labour Faces its Own Challenges from the Greens and SNP

Labour hasn’t been immune to the Farage-virus.

Working class voters are being attracted to UKIP as worries over the perceived links between immigration, benefits and unemployment are poorly addressed by Miliband & Co.

But unlike the Tories, Labour is also facing the increased popularity of both the Green Party and the SNP.

With the Greens surging to near 11% in recent polls, and surveys suggesting that the SNP could take around 30 seats off of them in Scotland, Labour are in danger of suffering a more extreme version of the voter-switch that occurred in the 2010, when the party lost key ballots to the Lib Dems.

Already here at Spreadex, we have seen a flurry of SNP seats purchases, with their spread increasing from 29-32 to 31-34, with our spread betting account holders selling our Labour General Election market at a spread of 280-286.

Spread Betting & CFD trading carry a high level of risk to your capital and you can lose more than your initial deposit. Only speculate with money that you can afford to lose. These trading products may not be suitable for all investors so seek independent advice.

Content by Connor Campbell of Spreadex

The contents on CleanFinancial.com including any articles or videos are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice or form the basis of an of investment decision.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

Content provided by Spreadex. Spreadex is Authorised and Regulated by the Financial Conduct Authority.

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