Should i buy Lloyds and Barclays shares?

gadgetmind

They aren't really even talking about a give away. No-one will make anything unless the shares get above 78p, so they are really more like share options. It all stinks of feel-good political fluff.

However, I wouldn't refuse the shares as they are risk free. Hmmm, what would happen to any divis on these shares? If they are ours to keep, then I'd look at these as a LTBH strategy without the hassle of the B stage!

Masomnia

I bought Lloyds recently, mainly out of greed thinking that they're a pretty certain long term play.

I do regret it though. I think it'll be years of stagnation before I get a return. Hopefully they'll start to pay a dividend in the next couple of years and we'll see a slight increase in price, and of course the income to make up for the losses.

My view on it is that they are a pretty certain long term play, but in the years between now and then there's going be lots of other opportunities to invest your money in sound companies to get you a decent return. No point having your money wasting away in a company that isn't going to be doing anything.

gadgetmind

Masomnia wrote: »

Hopefully they'll start to pay a dividend in the next couple of years and we'll see a slight increase in price, and of course the income to make up for the losses.

Unless they choose to ignore the terms of the LLPC/LLPD issues, then they can't pay a dividend on the ordinary shares until 12 months after they have failed to pay a dividend on these preference shares.

I'm hoping that LLPC start to pay in early 2012 but the market seems to have priced in both a degree of risk that this won't happen, and a degree of risk that Lloyds will cease to be.

LLPC are trading at around 86-88p, so a yield of over 10% if/when they start to pay again. Crikey, I'm getting close to talking myself into dropping a few more £k into these!

To counteract this, I'll go and read the Motley Fool bank board for a while to see how the AIB and BOI investors are fairing.

Thrugelmir

gadgetmind wrote: »

I'm hoping that LLPC start to pay in early 2012 but the market seems to have priced in both a degree of risk that this won't happen, and a degree of risk that Lloyds will cease to be.

Unlikely as banks in general will need to retain the cash to bolster their capital reserves. The financial crisis hasn't fully run its course yet.

gadgetmind

Thrugelmir wrote: »

Unlikely as banks in general will need to retain the cash to bolster their capital reserves. The financial crisis hasn't fully run its course yet.

My crystal ball is as cloudy as anyone's right now. I guess all we can do is sensible asset allocation and well-crossed fingers!

Thrugelmir

gadgetmind wrote: »

My crystal ball is as cloudy as anyone's right now. I guess all we can do is sensible asset allocation and well-crossed fingers!

Forgot to say in my previous post that Lloyds also has to be clear of Government support as well in order to resume dividends. (EU directive).

gadgetmind

The legal/EU situation is complex, but the consensus seems to be that divis can resume in early 2012, subject to board approval and profit situation. Paying out on the various prefs is dirt cheap, and will boost confidence in the bank and their ordinaries, so would make sense.

But still, I've taken a punt, and if the price of LLPC falls further, I may bolster my position.

blinko

with the banks there is more downside than upside I wish I had shorted it earlier they will come back after greexe has defaulted and that will be another crash

Thrugelmir

gadgetmind wrote: »

but the consensus seems to be that divis can resume in early 2012,

Lloyds made a profit of around £720 million in the 2010 financial year.

The provision for PPI selling made in the 1st quarter of 2011 was £3.2 billion.

So 2011 will not be a profitable year.

Thrugelmir

opinions4u wrote: »

Don't forget the £500m for Halifax SVR pricing from 1st January 2009 as the Credit Crunch demolished the business.

That was reflected in the 2010 results.

More worrying is the £200 billion tied in the Irish property market. Suspect they'll be more provision made against this part of the loan portfolio in the years to come.