Credit Analyst corner

by | Nov 19, 2020 | News

Yi Qian
I joined Atlanticomnium at the end of 2019, covering banks and insurance companies. I used to work in an insurance company for over 4 years with a conservative risk appetite and a focus on more senior asset classes.

At Atlanticomnium, we want to capture high income in this low-rate environment in a safe way. This makes the job to look for a solid fundamental financial institution more important. Only with a solid company, I feel comfortable to recommend to go down the capital structure. One of the new names I cover in Atlanticomnium that I have a strong conviction is Lloyds.

After years’ of restructuring and de-risking (total assets reduced by nearly 20% since 2009), Lloyds now follows a relatively low-risk business model and becomes the largest retail bank in the UK. I favour the bank’s preparation for the crisis. With one of the most prudent economic forecast, Lloyds took nearly £4bn loan loss provisions in the first half of 2020, meaning the bank set aside nearly £4bn cash to prepare for future shocks. This is one of the largest among European banks considering size and risk profile of the loan portfolio. It’s never wrong to be very prudent in the current environment, not to say Lloyds still enjoys around £7.5bn capital buffer on hand. This provides the bank with sufficient cushion to absorb potential losses from severe shocks in the economy. Last but not least, with strong fundamentals, Lloyds’ subordinated bond performance remains solid in this environment full of uncertainties. Lloyds is one of the names that I feel comfortable to investment recommendation.

  • The Valuation date: November 18, 2024
    serieAsOFDateFKFund NameISINMTDYTDSIMTDYTDSI
    120,241,118GAM Sustainable Climate Bond fundIE000BSJBO140.00770.0534-0.02070.775.34-2.07
    220,241,118GAM Star Crdt Ops EUR InvIE00B50JD3540.00670.11020.65440.6711.0265.44
    320,241,118GAM Star Crdt Ops GBP InvIE00B510J1730.00510.09320.92880.519.3292.88
    420,241,118GAM Star Crdt Ops USD InvIE00B57693100.00230.09340.84350.239.3484.35
    520,241,118GAM Interest Trend IncIE00BYM4P9130.00390.09350.37830.399.3537.83

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