Higher rates will also attract more customers in some areas of its business. Annuity rates, for example, are tied to interest rates, so, as interest rates rise, annuity rates will follow, making them more desirable for retired investors.
Aviva’s share price has previously fallen in line with declining interest rates (see graph). The price was around 850p in 2007, before the financial crisis, and then fell consistently to around 485p now.
The shares yield more than 5pc and trade at around nine times earnings, well below the market average.
HSBC
HSBC is a far more international bank than Lloyds. However, this means it stands to benefit from interest rate rises in America as well as in Britain.
“HSBC has suffered from a few things in recent years: lower interest rates, lower global trading volumes and tougher regulatory approaches,” said Ed Meier, a fund manager at Old Mutual Global Investors.
“However, we are convinced that the regulatory noose has stopped being tightened in any significant way, and now, with the first two hindrances easing, too, HSBC’s fortunes are being transformed.”