Deutsche Bank has restated its ‘buy recommendation on Lloyds Banking Group PLC (LSE:LLOY) its target price of 64p, following the full-year results.
Despite the bank's guidance for a decline in net interest margin (NIM) from the current level, Deutsche Bank has expressed confidence in Lloyds' potential for return on tangible equity (ROTE) of 17% by 2024.
The results were a beat, with NII increasing 26% year-over-year and beating consensus by 3%, while NIM at 322 basis points is up 24 basis points quarter-over-quarter.
However, other income was a 6% miss when excluding the benefit of an insurance change worth £230m, Deutsche said.
Revenues increased 21% year-over-year and beat by 7%, but costs increased 7% year-over-year and missed consensus by 2%. Lloyds currently trades at 6.1 times EPS and 0.97 times tangible book value.
The shares were up 1.6% at 52.7p, valuing the business at £35bn.
Of the 23 banks and brokerages covering Lloyds 17 are positive on the stock. The consensus price target is 65p.