The Lloyds (LON: LLOY) share price has struggled in the past few days as worries about the status of the UK economy emerge. With the UK inflation easing, there are fears that low-interest rates will last for longer. There are also key issues about the slowdown of the housing market and the rising Covid cases.
There is a wave of change going on in Lloyds Bank. In the past few months, the bank’s respected chairman, Horta-Osario stepped down and took a tough job at Credit Suisse.
And this week, the company welcomed a new chief executive who is vastly experienced in the wealth management industry. This means that the bank could seek to expand its business in the lucrative wealth management industry. This will be a shift in focus for a bank that generates most of its revenue from retail banking.
Another wind of change that is blowing in Lloyds Bank is that the bank has ambitions to become the leading landlord in the UK. According to the Financial Times, the bank is aiming to acquire and manage about 10,000 homes by 2025 and 50,000 by 2050. This is a significant change considering that very few businesses in the UK own that many houses.
And recently, Lloyds Bank acquired Embark, a company that brings millions of customers and billions of pounds in administration. For years, the bank has offered some of its asset management solutions through joint ventures. Its current joint venture is with Schroders.
All these strategies are meant to cushion the bank as interest rates remain lower. Across Europe, more banks are doing the same. For one, HSBC is pivoting to the Chinese market where European banks like UBS and Credit Suisse operates. At the same time, Banco Santander has launched a Wise-like money transfer business.
Regular readers know that I have been relatively bullish on the Lloyds share price for a while. I have long believed that the stock will likely jump to above 50p. However, there are signs that my view have been wrong.
Besides, the shares have formed a top at the resistance at 47.40p, which was the highest point on July 29. Another bearish thing is that the shares have moved below the 25-day and 50-day moving averages.
Now, the stock is eying the key support at 42.86p, which was the lowest level on July 20. Any move below this level will likely welcome more bears and see it drop below 40p. A move above 47.40p will invalidate the bearish view.