Lloyds Banking Group trades to the lowest level in the last two weeks as investors dump risky assets across the board. Analysts downgrade their forecast ahead of the announcement of the first half 2020 results on July 30. The low-interest-rate environment will affect the net interest income and net interest margins of Lloyds negatively.
Non-interest revenue expected 6% lower over the first half of 2020 and declining by 3% in outer years. The full-year profits will contract by 10%. The first-quarter net income shrunk 10.6% year-on-year to £4.0 billion on lower interest rates and increased competition. The pre-tax profit for the Q1 was £74 million. Wealth and insurance sector contributed £1.1bn of profit the previous year, around 15% of the bank’s total.
Lloyds is planning to expand further in the private client sector in a move to diversify away from the interest rate-dependent business.
Lloyds share is 54% lower since the highs from December 13, 2019. Lloyds share today breached below the 50-day moving average cancelling the rebound from March lows.
Lloyds is 0.48% lower at 30.93 today but off the daily lows as the correction from the June 8 highs continues. The correction might accelerate below the 50-day moving average. Now the bears are in full control of Lloyds share and lower levels mighty be on the cards.
On the downside, first support for Lloyds share is at 30.40 the daily low. The low from June 15 will provide the next support at 30.10. If sellers break that support area, then the next level to watch is at 28.87 the low from May 26.
On the flip side, initial resistance for Lloyds share is at 31.48 the daily high. Next supply area for Lloyds share will be met at 32.22 the high from Friday’s trading session. If the price breaks that hurdle, the next target is at 34.06 the high from June 16.