Proactive Investors - Lloyds Banking Group PLC (LON:LLOY)'s consumer business is making good progress, according to analysts at KBW Europe.
The research team, were commenting following what it called an "excellent" update from Lloyds’ management.
In particular, KBW said management highlighted that the business is on track to contribute c.30% of its total additional revenue target (£1.5 billion by 2026) and c.40% of its gross cost savings target (£1.2 billion by 2024).
This is achieved by a combination of new products as well as efficiency initiatives, it noted.
In terms of near-term performance, despite challenging margin trends, it remains comfortable with existing >310bps net interest margin guidance for 2023.
But KBW retained an underperform on Lloyds.
“We continue to like Lloyds as a simple, well-run UK retail and commercial banking operation, and the seminar yesterday very much confirms this proposition.”
“However, as we look into 2024, the dynamics for UK banking continue to feel demanding, with latest data showing no let-up in recent trends particularly in terms of margin pressure.”
It added the shares are not particularly cheap at 5.7x consensus 2024 /E with a limited chance of seeing positive news with third quarter results later this month.
Lloyds shares were down 0.8% at 42.30p.