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  • Lloyds shares: Hargreaves Lansdown investors are buying. Here’s what I’d do

    first_img Nadia Yaqub | Thursday, 26th November, 2020 | More on: LLOY Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Simply click below to discover how you can take advantage of this. Enter Your Email Address Image source: Getty Images I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. “This Stock Could Be Like Buying Amazon in 1997” Lloyds shares: Hargreaves Lansdown investors are buying. Here’s what I’d docenter_img It is not surprising to see why Lloyds (LSE: LLOY) shares fell to 24p in September. The bank is predominately UK-centric and most of its business is generated from its retail division, which includes mortgages and credit cards.Uncertainties over Brexit, the impact of Coronavirus and low interest rates have hardly been the ideal conditions for Lloyds. In fact, Hargreaves Lansdown points out that it has “been close to a perfect storm” for the bank and I would agree. Yet last week, Lloyds was the fourth most bought stock on the platform.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…So what now for Lloyds shares?Return to profitabilityLloyds released its third-quarter results in October, which were encouraging. The bank delivered a pre-tax profit of £1bn for the quarter, a significant uplift from the consensus forecast of £588m.Investors were happy to hear Lloyds had returned a profit after recovering from a loss during the first half of 2020. The bank suspended its dividend earlier this year to preserve cash during the pandemic.Mortgage lenderThe UK’s biggest lender saw its mortgage business increase by £3.5bn from June 2020. This has been boosted by the the stamp duty holiday, introduced in July 2020, on all properties worth less than £500k until the end of March 2021.Since a home is the average person’s main asset, I would expect Lloyds’ mortgage business to grow until then. To stop the property market grinding to a halt next year, I believe the UK Chancellor may even extend the stamp duty holiday beyond March 2021 or implement other measures.Low interest ratesUK interest rates are low and I expect such levels are here to stay. Lloyds’ business model is very simple. It takes deposits in and lends money out. In order for Lloyds to be profitable it will lend out money at a higher rate than it pays on deposits.Interest rates on deposits are already at rock bottom levels, which means that Lloyds can’t push its cost of funding much lower. Loan rates are close to low levels and don’t have further to fall. During the third-quarter, Lloyds not only saw an increase in consumer spending but also in retail current account deposits. Its appears that despite low interest rates, people are putting money aside for a rainy day.If Lloyds is managing to survive when there is not much wiggle room on deposit and loan rates, I would expect the bank to be able to stumble its way through the pandemic.Financially strongSince the 2008 financial crisis, banks are now assessed on their Tier 1 Capital (CET1). This ratio dictates the bank’s financial strength, and hence the higher the value the better position it is in to weather the storm.Lloyds’ CET1 Ratio of 15.2% highlights its strength and gives the bank significant headroom above its ongoing target of 12.5% and the regulator’s requirement of 11%.My viewAs a long-term investor, I would add Lloyds shares to my portfolio. It is a long and bumpy road for Lloyds and I do not expect a dividend to be paid out any time soon. Despite this, I believe the bank can emerge from this crisis. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Our 6 ‘Best Buys Now’ Shares Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. See all posts by Nadia Yaqublast_img read more