Lloyds Banking May Benefit From Budget's Corporation Tax Cut, Redburn Says
Lloyds Banking Group Plc may benefit overall from Chancellor George Osborne’s budget, as it gains more from a cut to corporation tax than it loses from Britain’s new bank levy, according to an analyst at Redburn Partners LLP.
Lloyds, 41 percent British government-owned, may see a 3 percent rise in its earnings a share in 2012, as corporation tax begins falling to 24 percent from 28 percent over four years, wrote London-based Redburn analyst Jon Kirk in a note to investors. “It is a net positive for Lloyds,” wrote Kirk. By contrast, Barclays Plc will lose 4 percent of its earnings a share, the report said.
Osborne said Britain would impose the annual levy on bank balance sheets yesterday to discourage risky practices, as he presented the coalition government’s new budget to Parliament yesterday. The reforms will bring “a greater contribution from the banking sector, one that far outweighs any benefit they receive from the lower tax rates,” Osborne said.
Lloyds gained 2.7 percent to 60.57 pence 10:40 a.m. in London, valuing the bank at 40.7 billion pounds.
To contact the reporters on this story: Jon Menon in London at jmenon1@bloomberg.net
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