Lloyds Bank (LYG) Stock Takes a Hit on Property Funds

After a property fund withdrawal freeze yesterday, Lloyds Bank (LYG) shares are lower today.
By Rachel Aldrich ,

NEW YORK (TheStreet) -- Shares of Lloyds Banking Group (LYG) - Get Report are down 7.48% to $2.54 on heavy trading volume this afternoon after asset managers froze withdrawals from property funds yesterday.

About 25 million shares of the bank have traded hands today, vs. the average of 8.9 million shares per day.

Lloyds Bank and Royal Bank of Scotland (RBS) are the two U.K. lenders most exposed to the commercial real estate market, JPMorgan said in a recent report.

Lloyds has 18.1 billion pounds - approximately 46% of its tangible net asset value - in the sector with RBS holding 25.2 billion pounds or 66% of its TNAV in the market.

As Brexit concerns continue to rumble throughout the U.K. economy, investors flocked to withdraw their assets from real-estate funds earlier this week. The withdrawal freeze yesterday poses a risk to these banks especially, JPMorgan said in a note cited by Bloomberg.

However, JPMorgan notes that the risk to these larger banks is still "manageable."

Shares of Royal Bank of Scotland are down 5.62% to $4.03 today at double trading volume.

Separately, TheStreet Ratings rated this stock as a "sell" with a ratings score of D+.

The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.

You can view the full analysis from the report here: LY

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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