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LLOY - Share buyback 2019

lse:lloy

#142


You can see from the chart that the opening price on the day LLOY went XD dropped. The increased volume of the buyback occurred after this drop. The pre-XD closing price was 64.88, and the dividend was 2.14p, so the true XD price would have been 62.74, and we have been below this level for most of the intervening period.

I do not think there was/is much reason for LLOY to go into freefall after this initial drop. The buyback (even the current increased level) only represents a smallish proportion of the daily volume, and would have a minimal effect on the sp. I believe that events external to LLOY have more bearing on the sp performance.


#143

We have now had five trading days with a daily average buyback of 22.1m shares (£13.86m). I am wondering if this will continue for another 7 days; thereby making each set of purchases at a particular level the same duration.

10.5% of the funds have been used to buy 0.41% of the shares in issue. The average price paid to date is 62.97p. The increased rate of purchases has moved the projected end date forward to March 21st.


#144

It’s a shame this site removed the historical shares in issue. I’ve yet to find a site with this information and if anyone knows of one that would be great.


#145

Bowman

Where are you mate

February figures are out

Claims are falling big time :slight_smile:

Get in there…


#146

Do you mean PPI claims Regardless? Have you got the link or the summary ?


#147

Been away visiting my sister on the West coast of Scotland, and I avoided doing any financial nonsense.

Looking at the data for the period I was away I see the average buyback for the past 9 trading days is now 21.7m shares (£13.8m) per day, so it seems thay are keeping the level more or less constant over that period, although more in monetary terms rather than number of shares. The maintained high level of re-purchases has now brought the estimated end day in to the beginning of February 2020. The average price paid has creapt up slightly to 63.41p.

I noticed there was a TVR RNS at the end of March, and this shows ~14m more shares that my spreadsheet, so it seems that some extra shares have been issued somewhere along the line recently. Comparing the TVR RNS’s for February and March, the total reduction in shares is 153.78m, but the Buyback RNS’s show 167.35m. The difference is only 0.02% of the shares in issue, although it is 0.08% of the number of buyback shares. Both percentages are really very small so hardly worth quibbling over.

With respect to PPI, it is good to see the monthly figure below £300m again, but it is still higher than the December figure. Hopefully we can see the number decending towards the £200m mark over the next few months. Trying to estimate the final total industry figure for PPI payouts is a bit of a lottery, but I am getting a number of about £36bn, and if this turns out to be true then the current LLOY provisions are adequate, so we should not see any additional provisions being made by LLOY, in fact they might be able to write-back some of the existing provisions (but only a small amount).


#148

Mark

Yes I posted on the incorrect thread I was talking about PPI

Thanks Bowman :slight_smile:


#149

OK, can you remind me how much provision LLOY has declared and as yet unspent? Might there be a deadline surge in August? Might BoE add another extension or ask LLOY to look again to historic claims? Might other bad debts increase to fill the void, how do things look at MBNA?

That said, the end is nigh and every pound not spent on PPI is pure profit, we might get an even bigger share buy back programme next year!


#150

Page 226 of the 2018 Annual Report shows the provision data, which was £19.45bn total provision of which £1.33bn had not been used. The same page adresses the MBNA situation, which is that the LLOY exposure is capped at £240m.

It is always possible that the authorities will come up with some other whease to get the Banks to put more capital into the economy, but I do not expect another rise in claims like the one in 2017. LLOY’s portion of the total payout peaked in 2015-16, and is now falling back towards the level seen in 2013.

The most likely scenario for me is that some other aspect (e.g. bad loan debt) will require provisions to be made, which will counterect the decline in PPI provisions. If the final total PPI payout comes in at my estimated £36bn and LLOY’s share remains at its current 53% level, then there should be about £200m to be written back; a figure that is really quite small.

LLOY made provisions of £750m in 2018, so they could make new provisions of the same level in 2019 without affecting the amount available for dividends, provided they manage to make the same overall level of profit (or higher). If they do not need to make these new provisions then this amount would be available to increase the dividend or buyback cash.


#151

Thank you yet again Bowman.

It is good to know that the hit from MBNA will be capped, because there have been stories of a surge in credit card defaults since Q4 2018, people who rolled over increasing amounts of debt on 0% card transfer offers now having to face up to it.

I agree with your analysis too, much of a further increase in PPI provision is unlikely but there may be a rise in other debt defaults, commercial and personal. There is provision to come from the SLA contract cancellation too.

Will the underlying business be any more positive this year, mortgage market subdued and interest rate rises on the back burner, I don’t think the benefits of digital transformation etc will be coming through just yet, and they are still holding back from a branch consolidation programme for fear of a public outcry.

Any modest improvements in underlying peformance and relief from PPI will go to further buy back, it is clear the trend for a slow and steady improvement to dividend almost paid for by the buy back programme is all we can expect.


#152

@meisterx,

I do not know of a site that has the historical shares in issue in graphical form. However, the LLOY website has all the “Total Voting Rights” RNS’s readily available, going back to December 2006, but you would need to open each one and extract the related data. I keep a dedicated spreadsheet for LLOY data, and these include the TVR data, and the information is shown in the following chart.

Back in 2006 the shares were 25p shares, whereas they are now 10p shares, which accounts for a portion of the increase in the number of shares. This occurred at the end of 2009, where 36.6bn new shares were issued, increasing the total from 27.2bn to 63.8bn.

There were 2 Open Offers, a Capitalisation issue and a Rights Issue between December 2008 and December 2009, in addition to the change in the nominal share value, which all together caused the large increase in the number of shares. This period covered the HBOS take over and the general re-capitalisation of the Bank during which HMG acquired a significant holding that was later sold down. The HMG sale of course did not change the number of shares in issue.


#153

The £240m I mentioned is LLOY portion of the MBNA PPI costs. This does not cover MBNA’s bad debt position, so any increase in debt defaults will have to be covered by LLOY. I agree that credit card users may fall into difficulties after over-using their cards, but ultimately many will be let off their debt at the expense of LLOY shareholders. I would be more worried about mortgage debt, especially if house prices were to drop drastically, although this will not be the first time this has happened and LLOY has weathered the storms previously.

I am unsure there are many significant benefits from the digital transformation left and branch closures have started to hit political resistance. We need one more branch consolidation, where each town has a single Bank, but this Bank is actually one building housing counters for all the major Banks where the counter staff have no single Bank loyalty. There will of course be small offices in these Banks where dedicated Bank personnal can fulfill their sales and co-ordination roles. Most other aspects would be covered by Cashpoint type machines. I think we still have quite some time to wait for the cashless society.


#154

Actually I have to pay off one off my credit card balances next month interest free period coming to an end , if I wanted I can still do another 0% card transfer for a small up front charge
Of 2.9% with another card issuer I hold

Good news is I going to be paying off the balance no need for the credit

I just took advantage of the cheap credit on offer and bought shares

I dont recommend this but it’s paid off I got lucky


#155

Hi meisterx - not sure how relevant it is, but on the Lloyds website you can download max/ min and volume traded? Possibly it’s reverse engineerable (it is known how many shares have been traded, and how many bought by Lloyds) to get the volume data needed? You’d simply need a reference point eg a specific day. Appreciate it won’t allow for staff stock transfers.

https://www.lloydsbankinggroup.com/investors/share-price-info/share-price-download/


#156

Darkhorse1765,

Unfortunately using the daily volume traded on the LSE will not allow an accurate estimation of the number of shares in issue, since the LSE traded shares are only a small portion of the daily trade. LLOY are traded on many other platforms.

The TVR RNS’s are issued monthly at the moment, with the buyback RNS’s issued on the day they occur (currently daily). I run a spreadsheet worksheet that includes the TVR and Buyback data, and it is an easy exercise to keep this up to date. However it is necessary to keep an eye out for block-listing RNS’s, which {should} indicate when new shares are issued.

There was one TVR RNS (28th February 2019) immediately before the buyback started (1st March 2019) and there has been one further TVR RNS (29th March 2019). My calculation of the number of shares bought back between 1st March and 28th March taken off the TVR data for 28th February yields a figure that is 13.57m smaller that that shown in the 29th March TVR RNS. This indicates that this many new shares had been issued, however, there was no RNS covering this issuance. 13.57m is only 0.19% of the total shares in issue, so fairly irrelevant.

I adjust my calculation of the total shares remaining in issue whenever the TVR data are available. I think this is about as accurate as one can get.


#157

Today’s buyback data shows that they are continuing with the £13.85m level, since today is the 13th day at that level. They have expended 16.8% of the funds to buyback 0.65% of the shares.

The average price paid to date is now 63.82p, and the estimated end date has moved back to the beginning of January 2020.


#158

Morgan Stanley and UBS (the ‘Joint Brokers’ responsible for the Buyback) have continued spending £13.8m per day, as this is now the 15th day where that level has been spent. A total of £322m has so far been spent on 505m shares, at an average purchase price of 63.78p. It will be interesting how long they intend to maintain this level.


#159

Further on the continuing constant level of buyback cash expenditure. I wondered how the accumulated buyback cost compared with 2018; I had previously just plotted the individual daily share volume/cost.

The 2018 buyback varied considerably from day to day, whereas the 2019 buyback has used 3 basic daily cost levels (see post 139 avove). I plotted the accumulated buyback cost as a percentage of the buyback funds allocated, which is shown below. [Note : The x-axis of the chart is the number of trading days since the start of the buyback]


One can see that the rate at which the funds are being used is similar to 2018, so they might decide to continue at the current rate for another 40 days or so. 2018 took 213 trading days ( or 169 calendar days). If the same duration is applied to the 2019 buyback, then the final date would be August 17th 2019, considerably earlier than my previous estimate of the end of December 2019


#160

I going to hold while Antonio is buying here :sunny:


#161

In contrast …

"Apple also said its board had authorized an additional $75 billion in share repurchases and raised its dividend by 5 percent. Apple said it spent $27 billion on share buybacks and dividends during the fiscal second quarter, which is a record for the company. "

Now that is a buyback, Apple market cap is around $1000B having surged 5% on this announcement. I would have said this is a record buyback for all companies ever. Unless, in the words of Esther Rantzen, you know different?