BUZZ-'NII headwinds building, switch into Lloyds from RBS' - MS
BUZZ-'NII headwinds building, switch into Lloyds from RBS' - MS. ** Morgan Stanley (Xetra: 885836 - news) ups Lloyds to "overweight" seeing the bank most resilient against NII headwinds building. ** "Mortgage front book pricing, slower growth and a flattening curve paint a difficult picture for UK NII in 2019," MS says. ** MS sees manageable pricing pressure for Lloyds, says consensus "c. 13-14% ROTE 2019/20E is realistic", and stock too cheap to ignore despite macro risks. ** It sees most earnings risk at Royal Bank of Scotland (LSE: RBS.L - news) , cuts the stock to "equal weight" citing mortgage refinancing risk, higher loan growth expectations, and higher rate sensitivity.