The Lloyds share price will be in the spotlight after the company upgraded its business outlook, even as its Q2 profitability took a hit. LLOY shares are trading at 45.35p, where it has been in the past few days. They have risen by over 7% from their lowest level this month.
Lloyds Bank results summary
Lloyds Bank published its quarterly results on Wednesday morning. The firm reported a statutory profit of £2.8 billion after tax, which was lower than £3.9 billion in 2021. This drop happened since the company released a significant impairment charge in 2021. Its net income rose by 12% to £8.5 billion as high-interest rates led to a robust net interest margin.
Other data showed that the company’s customer loans and advances rose by £7.5 billion to over £456 billion. Customer deposits rose by £1.9 billion to over £478 billion, while its CET1 ratio of 14.8% was better than the target of 12.5%.
Most importantly, Lloyds said that it will do well in the final half of the year. It expects its banking net margin to be bigger than 280 basis points. Its capital generation is expected to be bigger than 200 basis points, while its Return on Tangible Equity (ROTE) is expected to be 13%. In general, while the company’s results were not impressive, the positive forward guidance will likely push the Lloyds share price higher.
In the first six months, we have delivered a strong financial performance. Underlying profit before impairment of £4.1 billion was up 34 per cent on the first half of 2021, with increased average interest-earning assets, a strengthened banking net interest margin.”
Said Charlie Nun, the companys CEO
Lloyds share price forecast
The daily chart shows that the LLOY share price rose sharply after the company’s strong quarterly results. It managed to move above the descending trendline that is shown in black. The stock also rose above the 25-day and 50-day moving averages, while the Relative Strength Index (RSI) is approaching overbought.
Therefore, the shares will likely keep rising as bulls target the next key resistance level at 50p. A drop below the support at 43p will invalidate the bullish view.