I also wanted to rush the report out today as the share price has only recently fallen into what I consider the attractive zone. Lloyds TSB are the acknowledged best bank in the sector, and one of the best managed banks in the world. Under the leadership of Sir Brian Pittman, they have a consistent record of increasing shareholder value. With that sort of growth, it's not surprising that the share price has followed higher, rising from about 330p at the start of 1996 to today's price of about 750p. I believe Lloyds TSB gets past virtually all of them.
Banks are notoriously difficult beasts to value, and evaluate.
That's because they are not widget-makers, and things like gross margins and operating margins either don't exist or are not easily identifiable. One could argue that Lloyds TSB doesn't have a sustainable competitive advantage, and that is definitely a risk. There have been lots of new entrants in the banking arena in recent years, and they've been taking market share away from the traditional high street banks. If I was looking for a mortgage, or a current account, or insurance, I'd look for the cheapest out there, and not any particular brand name. Yet, despite that competition, Lloyds are definitely doing something right, and that something usually involves creating shareholder value.