Lloyds near 106p pivot as 3.65% dividend held

Shares in Lloyds Bank traded at 100.5p on Friday, close to a 106.26p Murrey Math pivot after the lender published first-quarter results.

In the quarter, net interest income rose to £3.56bn from £3.29bn a year earlier. Other income increased 11% to £1.6bn, taking total net income to £4.78bn. Underlying profit climbed 31% to £2.0bn and statutory profit after tax rose 37% to £1.5bn.

Management said improved margins were supported by higher UK gilt yields and current Bank of England policy. The ten-year Gilt yield is around 4.90%, up from a year-to-date low near 4.22%, and the two-year yield is about 4.3%. The Bank of England’s policy rate stands at 3.75%; officials have indicated further increases remain possible if inflation stays elevated.

On the market, the share price has traded in a narrow range in recent months and formed a symmetrical triangle pattern on daily charts, with support at the 100-day exponential moving average and pressure near the 106.26p pivot.

Lloyds maintained a dividend yield of 3.65% and is conducting share buybacks of up to £1.75bn. The bank said it will move its common equity tier 1 (CET1) ratio gradually toward a 13.0% target from about 13.4%, a reduction that has progressed over several quarters.

The lender reported it has concluded a long-running motor vehicle insurance issue that previously weighed on results and consumed billions.

The broader UK economy has faced headwinds: manufacturing activity has been under pressure, unemployment has remained above 5%, inflation has stayed elevated and public debt has increased. Political tensions have risen, including an announcement by Andy Burnham that he intends to challenge Keir Starmer for the Labour leadership.

Higher gilt yields and central bank policy will affect future net interest income. Lloyds’ recent results reflect current yield and policy levels, and the bank continues to return cash to shareholders through dividends and buybacks.