Lloyds to stun City on profit

Broken_hearted

Doozergirl wrote: »

That's called reducing risk. It doesn't increase profit. Profit is made on the interest on lending amongst other things, hence they're out there desperate to lend, but to the people and businesses with the top credit scores.

Article isn't really about that though.

Maybe not but reducing limits and demanding money back gives them a massive leap in money in which helps them look better and have more money. Even a couple of hundred of each person would make them look in a much better position.
Of course cutting limits for those who are not up to their limit would only cut the risk of them spending up to the limit. However they seemed to target those who lived right on the limit.

Degenerate

Bloo_Loo wrote: »

Mark to model....you know it makes cents.

...except mark-to-market accounting rules were not relaxed over here. If they do indeed show a profit, it will be the result of mark-to-market previously forcing them to make huge write-downs ("losses") on assets that have now recovered some value ("profits"). We got most of our bad banking news out of the way at the start of the year.

Doozergirl

Broken_hearted wrote: »

Maybe not but reducing limits and demanding money back gives them a massive leap in money in which helps them look better and have more money. Even a couple of hundred of each person would make them look in a much better position.
Of course cutting limits for those who are not up to their limit would only cut the risk of them spending up to the limit. However they seemed to target those who lived right on the limit.

No it doesn't make them look better! They need to lend money to make profits; bringing in the deposits to match up to that lending is what helps them look good. Selling less of what you make a business of selling is not a good move; if you are selling less then you have to increase margins, which is what the banks have done.

However, the banks will be still be targetted with lending as much, ney more than, last year and desperately chasing people to lodge their savings with them to offset that. Just keeping a low risk model.

"Having more money" does not equal making a profit. If you do nothing to increase the amount of money you have, you will eventually run out of it!

chucky

you would be very short-sighted or not understand what the write-downs were for if you didn't expect write-ups to happen...

it's a combination of leveraged loan prices increasing and banks reducing the size of their loan portfolios.