It's tempting to focus on the 26% collapse in Lloyds’ profits when viewing Thursday’s numbers from our biggest retail bank.
But the fact is if you strip out the cost of recompensing the public for ripping them off all those years ago on their PPI, the figures aren’t at all bad.
In a nightmarishly tough time for banks, where interest rates are low and — for all António Horta-Osório’s positivity — confidence among business borrowers has been rock bottom, Lloyds fared well in 2019.
Much of that is down to H-O’s obsessive grip on costs (which extends to head office staff having to share desks) and a decent record on bad debts. Having warned of the risks to Lloyds of taking on more unsecured lending with its takeover of MBNA’s credit cards in 2017, I’ve been pleasantly surprised to see no increase in customers falling into arrears.
So, despite the low rates environment, Lloyds can still promise shareholders that it can make a return on equity this year of 12%-13% — a number H-O’s peers at Barclays, HSBC and RBS can only dream of.
The key question is, now it has nearly a quarter of the market in everything from mortgages and current accounts to credit cards and SME lending, where does the growth come from next? H-O is upbeat about motor finance and wealth management, but we could be approaching “peak Lloyds”.
Little wonder there’s so much talk of him jumping to another ship while the going’s good.
With chairman Lord Blackwell’s term ending in 2021, the board may have to do a double dose of headhunting. Could be messy.