Lloyds Share Price Plummets as Investors Digest Flat Annual Profits

Lloyds share price has been hovering below the important support level of 52p for the past few days ahead of its earnings report. At the time of writing, the LLOY stock was trading 2.21% lower at 49.85p. The company’s shares have slipped by more than 4% in the past week, but remain 10% higher in the year to date.

Earnings Report

Lloyds share price was in the spotlight earlier on Wednesday after the British bank announced its full-year earnings. Lloyds is one of the largest financial services organizations in the UK and has always been considered one of the “big four” clearing banks.

Lloyds Banking Group announced on Wednesday that its fourth-year profits almost doubled in 2022 as its loan book swelled and interest rates increased. In its announcement, UK’s largest lender said its quarterly pre-tax profit came in higher at £1.8 billion, up from £968 billion over the same period in 2021.

Despite the surge in quarterly profits, Lloyds reported flat annual profits of £6.9 billion, in line with analysts’ estimates and the same as 2021. Even so, the banking group reported an almost 50% jump in its net interest income to £14 billion against the backdrop of higher borrowing costs and a boost in its net interest margin. This accounts for the difference between what a bank charges for loans and what it pays for savings.

Lloyds was forced to put aside £1.5 billion for potential bad loans as it cautioned over uncertainty in the economic outlook. This was slightly higher compared to the previous £1.4 billion a year earlier when the lifting of coronavirus restrictions had increased optimism.

Lloyds Share Price Forecast

The daily chart shows that Lloyds share price has been on a steep downward trajectory for the past few days. The stock has been moving below and along the 25-day and 50-day moving averages, respectively. Its Relative Strength Index (RSI) has also been on a sharp downfall for the past few days.

Therefore, the LLOY stock price is likely to continue inching lower in the medium term as traders eye the next support level at 47.10p. However, a move past the important level of 52p will invalidate the bearish view.

LLOY Price Chart

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