Introduction
Despite U.K. interest rates at record lows since 2009, Lloyds (LYG) has delivered growing Net Interest Margin ("NIM") and Profit After Tax. Even after rising 27% YTD, Lloyds shares trade at less than 9x Price/Earnings ("P/E") on 2019 earnings and 1.2x Price/Tangible Book Value ("P/TBV"), cheaper than key U.S. peers.
This article reviews the drivers behind Lloyds' earnings performance to assess if they can remain stable or even drive further growth. We believe Lloyds has been "shrinking to grow", reducing the size of many of the aspects of its business to maintain