Lloyds top pick for Credit Suisse among domestic UK banks

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Lloyds Banking Group PLC (LON:LLOY) is a top pick for analysts at Credit Suisse among the UK’s domestic banks, which they said are “attractive” amid an improving economic and interest rate outlook for the UK.


In a sector note on Wednesday, the investment bank said UK interest rate expectations have “improved during June” which they did not think was reflected in the current consensus, adding that this outlook made domestic UK banks their preferred choice over the international names.


READ: Lloyds due to close 100 branches this year


Credit Suisse also highlighted survey data showing consumer and business confidence had “meaningfully improved” in the latest quarter, with unemployment rate forecasts for 2021 having “declined substantially” implying a lower level of deterioration than previously anticipated.


With this in mind, analysts said valuations in the sector are “cheap” relative to European banks and their analysis for 2022-23 earnings was “meaningfully higher than the market”.


Shares in Lloyds were flat at 46.8p in late afternoon trading.

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