Overstone International Value Fund on Lloyds Banking Group plc
Thesis
Lloyds is one of three bank holdings that benefited from expectations that interest rates would remain higher for longer. The fund says the banks are generating double-digit returns on tangible equity while maintaining resilient asset quality. Despite those returns, valuations remain moderate at roughly 9-12x earnings. That combination of profitability, credit resilience and modest valuation supports the long case.
“All three are generating double digit returns on tangible equity and are reporting resilient asset quality.”