As I See It
Expect Lloyds to push on + cyber warnings ignored
It’s taken the best part of a decade but today marks the end of a dark period for Lloyds Banking Group.
The Treasury has sold its remaining shares, handing the bank fully into the private sector.
Lord Blackwell told shareholders at the annual general meeting in Edinburgh last week that the taxpayers’ stake was down to 0.25% heralding the final push to find buyers.
Investment bank Morgan Stanley has been drip-feeding Lloyds shares into the stock market, following a pattern set by the US when it returned its own bailed out banks to private investors.
So, who’s buying and what are they getting?
The fund manager Neil Woodford has been a buyer, snapping up £200 million worth last week alone.
It ends his three year self-imposed lock-out from banking stocks and sends a signal to the markets that it may once again be fashionable to buy into the sector.
Banks are seen to be on the mend and economic conditions, despite all the Brexit warnings, may be turning in their favour. The British economy has slowed, but this will make reliable stocks more appealing and Lloyds can now be considered a de-risked stock.
Furthermore, interest rates are likely to rise, which is good for banks as it improves their margin, and the key mortgage market is holding up amid continuing strong figures from house-builders.
Lloyds has a particular attraction because of its lack of overseas exposure. Crucially, it is back in profit and paying dividends, returning £2.2 billion to shareholders this year.
The bank is now the 11th biggest holding in Mr Woodford’s £10bn equity income fund, accounting for 2% of its assets. Don’t be surprised if he adds to it.
Hack attack and a question of priorities
Disaster waiting to happen? That old cliche was most apt this weekend as the cyber attack on the NHS exposed a series of failings to protect the service.
Its computer kit is simply out of date and the hackers are finding it easy to access. Yes, the familiar story of a lack of investment. In this case, with crippling repercussions. With operations and appointments cancelled it’s fortunate that there have been no serious human casualties.
Naturally, the blame game has begun, though this time it is entirely justified.
Politicians are too focused on short term performance figures to bother with underlying problems.
It is therefore no surprise that attention has switched quickly to Jeremy Hunt, the UK health secretary, who is being accused of ignoring warning signs.
Accusations that managers failed to apply recent security support packages which would have protected their systems have exposed Mr Hunt as the skinflint secretary who has left the NHS to meet his targets on a decrepit computer system. And this at a time when the government is prepared to invest in upgrading Trident. Priorities, huh?
Nearly 5% of the NHS’s computers still use a 20-year-old Windows XP system, or its more recent Windows 8 and Windows 10 variants which are vulnerable to new malware viruses developed by hackers.
It has emerged that vital deals with Microsoft were not taken up unless individual trusts, already struggling for cash, were prepared to cough up more millions. Without these “patches” they were sitting ducks. Let’s hope the hackers don’t find their way into the nuclear codes.
It’s not as if this is the first time the NHS has been hit by hackers. Without proper attention it will happen again.