LONDON, Feb 18 (Reuters) - Ireland's economic problems are set to cast a shadow over the results of part-nationalised British banks Royal Bank of Scotland (RBS.L) and Lloyds (LLOY.L) next week, and may even push RBS into making a loss.
RBS reports full-year and fourth-quarter results on Feb. 24 while Lloyds follows up on Feb. 25. This week, Barclays (BARC.L) posted a sharp rise in 2010 profits. [ID:nLDE71E08R]
This is a recovery stock so patience is required and it depends on the company's execution. All things being equal and normal, i.e economic stability and growth, your reasoning and expectation is certainly plausible, and LYG should be relatively better in 2 years. You will have to have faith in the company's management, from what I have read on the new CEO, he appears to be a capable one.
I know people who have owned Apple before the Ipod days until now. So, good luck.
I feel more comfortable that the bank will not be broken up. LYG already meets Basel II requirement, unless there is another recession in the U.K. then all bets are off. Also, if Basel II is to be further tightened, then LYG has to raise more capital, they can do it, just more dilution.
Having said all this, I do expect (or hope) that LYG be able to reach around 1 pound perhaps a little higher in 12 months, depending on the market expectation of the company's 2012 earning potentials going forward, but being able to stay there is another question.
ADR between 6 to 8 bucks per share is hopeful for the next 12 months....of course, purely my expectation.
I feel that LYG should buy back their stock from the Government in installment blocks. Once they buy out the Government's stake, then they should buy more shares on the open market. After that, re-instate the dividend in 2013.
I have heard late 2011 or early 2012 for the UK to get out. I guess it depends, though.
I think a share buyback will happen first before a dividend reinstatement, since the 2 Rights Issues that were issued in 2009 created a buttload of shares.
I think the Share Price will steadily increase during 2011. Probably not back to the good old days of $30/$40 per share, but decent. Probably $8-$10 at the end of 2011.