Lloyds shares steady amid GDP surprise and rising yields
Lloyds shares were little changed on Sept. 11 after UK GDP rose 0.4% in July; higher gilt yields and bearish chart signals have raised the prospect of a reversal toward 100p.
Lloyds Banking Group shares were little changed on Sept. 11 after official figures showed UK GDP expanded 0.4% in July, leaving the stock trading in a narrow range about 6.1% below its peak this year.
The Office for National Statistics reported GDP growth of 0.4% in July and 0.4% in the three months to July, above forecasted gains of 0.3%. Trade data showed a narrower deficit and industrial and manufacturing output were revised higher. Those figures are significant for Lloyds because it is the largest retail bank in the UK, with more than 26 million customers and wide exposure to household and business lending.
UK government bond yields have risen to multi-year highs. The 10-year gilt reached about 5.34% and the five-year yield rose to roughly 4.88%. Market pricing and central-bank commentary have pushed expectations that interest rates may remain elevated; a prediction market indicated about an 80% chance of another Bank of England rate rise this year. Higher yields affect banks by widening potential lending margins.
Lloyds reported half-year profit before tax of £4.3 billion, up from £3.5 billion a year earlier, and net interest income of £7.3 billion, a 9% year-on-year increase. Company statements credited structural hedges, volume growth and the higher-rate environment. The bank has introduced an Accelerate 2030 strategy aimed at lifting revenue growth, improving connectivity across the group and raising productivity, with targeted cost savings of around £2 billion over the plan’s life.
The board has increased dividends and carried out a substantial share buyback programme. Repurchases have reduced shares outstanding to about 58.16 billion from more than 70.14 billion in 2022.
On technical charts, LLOY pulled back from a high near 116p to about 110p. Price patterns show a rising wedge-two converging upward trend lines-and momentum indicators including the Relative Strength Index and the Percentage Price Oscillator have diverged from recent price gains. Some technicians project a test of the 100p area if selling pressure intensifies.
Investors are weighing the stronger GDP data and the bank’s recent results against higher bond yields and the technical risks when assessing Lloyds’ near-term outlook.
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