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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (32124)	12/17/2009 5:35:49 PM
From: Spekulatius	Read Replies (2) of 78472

LYG - currently trading at 51pence with tangible book at 64 pence. LYG is the largest UK bank (in terms of domestic market share after the ill fated takeover of HBOS). They recently did a secondary for their common and a debt exchange that boosted core Tier 1 to 8.2% (or thereabouts) to enable them to escape the asset protection plan setup from the government (mostly for HBOS legacy assets) . There are a couple of presentations in LYG's website regarding the capital offering - you will get more info if you are/claim not to be an US citizen :-). LYG right now seems to me like buying BAC at 8$. there are a lot of parallels - extraordinary help from the government, ill fated takeover but a sound core franchise with high domestic market share. Writeoffs are supposed to tail off if you believe management. Not without risk but if indeed the UK economy stabilizes and recovers this should take off. I bought a tiny position today and look to buy more. this was a decently managed outfit but the HBOS (HBOS was 2x Lloyd's size at the time of the takeover) was a huge mistake that almost did them in. now I think we are close to a bottom and they should have enough capital to survive.

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