Bank Financial Analysis

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  • Topic: Lloyds Banking Group, Bank, Cash flow
  • Pages : 21 (6584 words )
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  • Published : September 5, 2012
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PART – 1 –Project objective and overall research approach

1.1 Introduction
1.1.1 Topic chosen
The topic I’ve chosen for my research project is “Topic No-8 - Business and financial performance over a three year period”. My choice for organization is “Lloyds Banking Group (LBG)”. I’ve made comparing LBG with its competitor Barclays Group to be meaningful analysis. 1.1.2 Reason for choosing topic area

During my ACCA study, I like F7 (financial reporting) and P3 (Business Analysis) more than any other subjects. I’ve selected “Business and financial performance over 3 years periods” as my research project topic because I always want to apply my knowledge and theory which I’ve interested in. In addition, I want my future career to be related with those areas.

1.1.3 Reason for choosing topic organization
In every developed country, banks are important for its improvement in economy and wealth of its citizens. I intend to work at a good reputed bank in future. Then I become willing to know how UK listed banks perform successfully and reliably for their customer. In UK, listed banks provide more complicated and sophisticated service to meet customers’ satisfaction. Among them, I am especially interested in Lloyds Banking Group which is leading financial service group providing a wide range of banking and financial services. (en.wikipedia.org, online, 2011)

Lloyds Banking Group plc is a British financial institution, which was formed through the acquisition of HBOS by Lloyds TSB in 2009. Lloyds TSB was formed in 1995, as Lloyds Bank and the Trustee Savings Bank (TSB) merged together. This makes it the second largest bank in UK and largest by market share. Lloyds Bank was one of the oldest banks in the UK, tracing its establishment to Taylors and Lloyds founded in 1765. Through series of mergers, Lloyds emerged to become one of the Big Four banks in the UK. The company operated in England and Wales as Lloyds TSB Bank plc and in Scotland as Lloyds TSB Scotland plc. In 2001, a wave of consolidation in the UK banking market led the former Halifax Building Society, which traces its roots to 1853, to agree a £10.8 billion merger with the Bank of Scotland; Halifax is now used as brand for it’s the Bank's branches in England, Wales and Northern Ireland and for savings and mortgages in Scotland. Now HM Treasury’s stake in the group has reduced to 41.3 per cent after capital raising programme in February 2010. Lloyds TSB was appointed the first Official Partner for the London Olympics 2012. Lloyds TSB is also currently the official sponsor for the Asian Jewel Awards. The awards recognize the contribution made by the Asian community in Britain today. Lloyds Banking Group is quoted on both the London Stock Exchange and the New York Stock Exchange and is one of the largest companies within FTSE 100. Moreover, Lloyds Banking Group had been awarded several reputable rewards. * Lloyds TSB was announced as the winners of its awards for excellence by Euro-money in July 2008, and top in the Race for Opportunity’s (RfO) annual survey in June 2008. * In May 2009 Lloyds TSB Corporate Markets was recognized as ‘Bank of the year’ for the fifth year running at Real FD/ CBI FDs’ Excellence Awards. * Lloyds TSB won the award for Best Overseas Mortgage Lender. 1.2 Aims and objectives research project

The objective of my research project is to analyze business and financial performance of LBG to know whether it is reliable for customer, it is worthwhile to invest for shareholders and whether it meets its obligations as a responsible bank. Investors, shareholders or bank managers ask THREE basic questions when they examine the accounts of a business. They are position, performance and prospect of this business (Richard Pike and Bill Weale, 2003). To meet this objective, I need to evaluate by not only reviewing financial issue such as level of profitability, liquidity, solvency, asset utilization...
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