Broker snap: Lloyds a strong recovery play

19th Aug 2009 12:45

Long suffering shareholders of Lloyds Banking Group, many of whom bought the shares for dividend income, can look forward to the bank resuming dividend payments next year, analysts at Royal Bank of Scotland (RBS) predict.RBS believes its fellow part-nationalised bank is on the recovery trail and its finances should be sufficiently restored to pay a nominal dividend in 2010 while the company could have scope to improve the pay out substantially in 2011 as a result of improved margins, lower write-downs and tighter cost controls.RBS has upgraded Lloyds to 'buy' from 'hold' and lifted its price target from 60p to 150p. The shares represent a 'compelling restructuring opportunity,' RBS reckons.