- FTSE 100 closes 15 points under
- NatWest chief executive Alison Rose resigns
- Rolls-Royce powers ahead after raising guidance
4.40pm: FTSE lower at the close
The FTSE 100 tried to regain ground in the last hour of trading but stocks couldn't stage enough of a rally to recoup the day's losses.
At the close, the FTSE was 15 points under at 7,677, a 0.2% loss on the day.
Pre-Fed hesitation kept stocks on the back foot, but Rolls-Royce shares have soared after a "jumbo-sized" upgrade to forecasts, according to Chris Beauchamp, Chief Market Analyst at online trading platform IG.
"In London the hefty upgrade to Rolls-Royce’s forecasts have seen the shares make impressive gains, recouping their March 2020 highs and seemingly bringing the tough post-pandemic era to a definitive close," Beauchamp noted.
But the Fed is expected to leave the door open for more hikes.
“Those hoping for an accommodative Jerome Powell are likely to be disappointed, and this risks a wider pullback in equities too," Beauchamp wrote. "Inflation in the US has come down impressively, but is expected to rise again in coming months thanks to base effects, along with gas and food prices, and with financial conditions loosening again thanks in no small part to the rally in equities, it looks like the Fed will have to give investors a dose of tough love.”
3.42pm: Markets struggling for direction
Stock markets are still struggling for direction, according to Craig Erlam, senior analyst at OANDA, as investors focus on the outcome of the Fed and ECB meetings.
"In both cases, a 25 basis point rate hike is heavily backed in the markets, but at the same time the language that accompanies the decision and what comes next is less obvious," Erlam added.
"I think there's every chance that in both cases, policymakers opt to accept that a pause at the next meeting may be appropriate while in no way closing the door on further hikes in the months ahead."
"In other words, data dependency will be heavily emphasized with the overall tone perhaps being a dovish hike with a slight hawkish twist."
"The last thing policymakers want is for investors to perceive this to be the end of the tightening process but that will be a very tough message to get across, particularly in the absence of fresh forecasts."
3.12pm: Entain on the surge
Entain’s US joint venture BetMGM has confirmed it expects to make an underlying profit in the next six months after sales continued to rise in the first half of the year.
Adam Greenblatt, BetMGM’s chief executive, said: “Our financial guidance for the year remains on track - we expect to deliver US$1.8 to $2.0bn in full-year revenue, as well as to be EBITDA positive in the second half of 2023.
“In fact, we have already achieved positive EBITDA for the full second quarter of this year.”
Greenblatt added he expects BetMGM will become self-sustaining in this half year, with no additional equity investment expected from Entain or its partner MGM Resorts after the US$150mln previously committed for 2023.
Net revenue in the first half rose to US$944mln, putting the group on track to hit the upper end of forecasts, it said.
Shares are up 4.2% to 1,354p
2.40pm: Tottenham Hotspur owner surrenders following insider trading allegations
Tottenham Hotspur majority owner Joe Lewis has surrendered in the US after being indicted for orchestrating an insider trading scheme.
Lewis’ lawyer, David Zornow, said the 86-year-old had voluntarily arrived in the US to answer the “ill-conceived” charges which would be “defended vigorously in court.”
Yesterday, Lewis was indicted by US Attorney Damian Williams, who confirmed the charges in a video posted on Twitter where he said Lewis was the mastermind behind a “brazen insider trading scheme.”
The billionaire originally from Bow in East London, was accused of “classic corporate corruption.”
“Today I am announcing that my office, the Southern District of New York, has indicted Joe Lewis, the British billionaire, for orchestrating a brazen insider training scheme,” said Williams.
“We allege that for years Joe Lewis abused his access to corporate boardrooms and repeatedly provided inside information to his romantic partners, his personal assistants, his private pilots and his friends.”
14.15pm: Natural gas rises
Natural gas futures in Europe rose past €32 per megawatt-hour, extending its rebound from the six-week low of €25 touched on 17 July.
Supply tightness coupled with increased cooling demand in the continent played a part in the rebound, while planned maintenance in Norwegian facilities is set to halt production for the key producer next month.
Still, gas prices are a fraction of an all-time high of €340 hit last summer, when Russia cut supplies of gas to Europe significantly as stockpiles remain robust.
Storage facilities are fuller than usual this time of the year, backing expectations that the region will be on track to meet the 90% storage target by 1 November.
Shares in British Gas owner Centrica were little changed, down 0.68% at 123p.
SSE was also little moved by the rebound in prices, down 0.77% at 1,793p.
1.52pm: LVMH weighs on CAC 40
Over in France, the CAC 40 is being weighed down by results from Louis Vuitton and Fendi owner LVMH.
The index is down 1.93% to 7,272 points, while the FTSE 100 is down 0.57%, or 42 points, to 7,647.
Shares in LVMH hit a six-week low, down 5% to €810, after second-quarter sales failed to impress.
Revenue was up 17%, just beating analyst expectations of 16%, sparking concerns that the tide is about to turn in the luxury market, given LVMH routinely smashed expectations.
The luxury fashion brand also reported a 1% fall in the US as appetite for high-end fashion begins to slow across the Atlantic.
1.30pm: London's movers
A quick snapshot at some of today’s biggest movers in London.
RTC- up 116% to 39p
Shares in RTC, the engineering and technical recruitment firm, more than doubled, adding 102% to 36.5p after it reported an increase in profits and revenues in the first half.
Revenue from continuing operations jumped 33% to £45.6mln, while contracted revenues grew to £43mln from £32.1mln, with an order book in excess of £200mln.
RTC, which works with Network Rail, also swung back into a profit of £1mln, after a first-half loss last year of £400,000.
Saietta- up 25% to 45p
Saietta inked a new agreement with a commercial partner, described as “one of the largest OEMs in the Indian light-duty mobility market”, which sets up an opportunity to distribute some 60,000 EV drive chain units over a potential 5-year period.
The agreement covers an anticipated third line of electric vehicles with its existing Indian client, and, follows a previously announced client partnership, which was set up to support product development and industrialisation of electric vehicle (EV) drive systems and their associated electronics.
Rolls-Royce- up 18% to 180p
Shares soared after the engine maker bumped up full-year guidance on the back of a strong first half and a successful start to its transformation plan.
Operating profit came in at between £660mln and £680mln during the first half, the FTSE 100 aerospace and defence group said which was more than double analyst expectations.
SIMEC- up 17% to 1.1p
SIMEC rallied 17% to 1.1p as the company's restructuring efforts began to pay off, according to its final results for the year ended 31 December 2022.
The company reported a significant reduction in group losses to £11.1mln, down from £74.1mln in 2021, driven by a £5.0mln decrease in operating expenses and a £2.0mln improvement in the valuation of the Uskmouth sustainable energy park.
Wilmington- up 12% to 292p
Shares shot up after the provider of data, information, education and training to governance, risk and compliance markets said profit for the full year is likely to be ahead of expectations.
Adjusted profit before tax is “likely to be ahead of expectations at £24.3mln, up some 18%”, according to a statement.
1.00pm: Wall Street seen subdued as markets await Fed rate decision
US stocks are expected to start flat to lower on Wednesday as investors await the latest Federal Reserve interest rate decision, with a 25 basis point hike expected, and assess a batch of earnings from major tech companies released after-hours.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were off 0.1%, with those for the S&P 500 down 0.2%, while Nasdaq 100 futures shed 0.3%.
On Tuesday, the DJIA clinched its 12th-straight winning session, a length not seen for the blue-chip average since February 2017, albeit closing just 26 points, or 0.08% higher at 35,438. The S&P 500 and Nasdaq Composite ended around 0.3% and 0.6% higher, respectively.
Mega-cap tech stocks were among the biggest movers in extended trading following their respective earnings reports. Google-parent Alphabet rose more than 6% as cloud revenue growth helped propel the company to a better-than-expected quarter.
On the other hand, Microsoft slid more than 3% after reporting slowing cloud revenue growth. Outside of Big Tech, Snap tumbled 19% in after-hours action after giving weak guidance for current-quarter performance.
Among the corporate earnings due on Wednesday, Coca-Cola, Stellantis, Boeing and AT&T are among companies expected to report before the bell, while Meta, Chipotle and Mattel’s earnings are slated for after the market close.
Investors mostly though are counting down to the Fed’s latest interest rate policy decision and subsequent press conference with chair Jerome Powell scheduled for 2.15pm ET Wednesday afternoon.
The market is pricing in around a 98% chance the central bank raises interest rates, according to the CME FedWatch Tool, which would mark a return to hikes after not increasing interest rates at its June meeting.
"Last night’s initial reaction to the numbers from Microsoft, and Google owner Alphabet would suggest that optimism might be justified against a backdrop of a still resilient US economy, and a Federal Reserve that looks set to be close to the end of its rate hiking cycle," commented CMC Markets' Michael Hewson.
"Today’s expected 25bps Fed rate hike, after last month’s pause, looks set to be the last rate rise this year, whatever Fed policymakers would have you believe.
"While Powell will try and make the case for further rate hikes, his time would be better spent in making the case for rates remaining higher for longer, and projecting when the FOMC expected the 2% target to be met," Hewson added.
"Core prices remain too high even with headline CPI at 3%, and it is here that the Fed will likely focus its and the market’s attention."
12.45pm: Heathrow Airport remains stuck in the red
Heathrow Airport has remained stubbornly in the red as it grapples with the cost of servicing its huge borrowings and the need to bring in extra resources to make sure it does not repeat the chaos in the terminals of 2022.
Britain’s largest airport and the premier European gateway for American, Chinese and Indian travellers reported losses of £139mln for the first half of the year.
This was an improvement on losses of £321mln posted a year ago, it remains a long off its pre-pandemic comparative of £153mln of profit in the first half of 2019.
John Holland-Kaye, the Heathrow chief executive who steps down in October after nearly a decade in charge, blamed Heathrow’s financial performance squarely on its regulator, the Civil Aviation Authority, for capping its demands for increases in per-passenger charges to airlines, levies which effectively go on the price of an air fare.
12.10pm: Lloyds faces gathering storm clouds
Lloyds Banking Group PLC (LSE:LLOY) remain under pressure as analysts warn of gathering clouds ahead for the UK’s largest lender after a jump in bad debt provisions.
Impairment charges for the six months leapt 76% to £662mln from £377mln the year before with £419mln of this arising in the second quarter, more than double last year’s total.
Roberto Rivero, market analyst at Admirals explained: “As the cost-of-living crisis squeezes budgets, higher rates will at some point translate into a visible increase in loan defaults, if it hasn’t already.”
“The fact Lloyds have significantly increased its loan loss provisions in the latest quarter is demonstrative of this.”
Danni Hewson at AJ Bell said “there are storm clouds gathering,” and Lloyds has to consider how many of its customers are likely to struggle as they face a jump from ultra-low fixed rates to the unexpected new normal.
12.01pm: Bank bosses meet government to discuss NatWest crisis
Bank bosses have told the government that the controversy over the closure of Nigel Farage’s Coutts bank account has damaged trust in the sector.
Andrew Griffith, economic secretary to the Treasury, this morning met UK banking leaders to “discuss the importance of protecting lawful freedom of expression for customers accessing banking services”, the Treasury said in a readout from the meeting.
The Treasury said: "Attendees from the sector acknowledged that recent events had impacted upon public trust for the whole sector and expressed their clear commitment to government policy on account closure and to act quickly to restore confidence."
"All participants committed to the principle of non-discrimination based on lawful freedom of expression, and to bringing their policies in line with the planned government reforms where needed as soon as possible."
Representatives from Barclays, HSBC, Lloyds Bank, NatWest, Nationwide and Santander attended the meeting.
11.16am: GSK bucks weaker market on raised guidance
GSK PLC (LSE:GSK, NYSE:GSK) is another share to buck the weaker overall mood after it upgraded its 2023 guidance following a strong second-quarter performance, led by key growth drivers including its Shingrix vaccine for shingles.
The pharmaceutical giant now expects turnover to increase by 8-10%, up from the previous estimate of 6-8%, and adjusted operating profit growth of 11-13%, up from 10-12%. Adjusted EPS growth is also expected to rise by 14-17%, up from 12-15%.
Sales for the three months ended 30 June 2023 grew by 4% or 11% excluding COVID-19 solutions to just under £7.2bn.
Shore Capital said the numbers exceeded consensus expectations.
"Overall vaccine came in line with expectation, but we note strong momentum continues to be sustained by Shingrix," analyst Dr Sean Conroy said.
He said with the recent strengthening of sterling, "we would now expect FX headwinds of c.1-2% on the top-line and c.3-4% on earnings for FY23F; with this in mind, consensus now looks towards the lower end of the guidance."
He has a buy rating on the stock with no material change on Zantac litigation. He flagged the next bellwether trial in California (November) as the next potential touch point.
Shares rose 1.0% to 1,407p.
10.51am: Second MGM bid for Entain "plausible" says Citi
Shares in Entain PLC (LSE:ENT) bucked the weaker market as analysts at Citi suggested a second bid from MGM was “plausible.”
The broker noted Entain’s shares have fallen post the STS acquisition and equity raise, sterling has weakened in recent days while MGM shares have strengthened.
Entain, which owns Betfair and Paddy Power, has a 50/50 joint venture with MGM in the US.
“We would expect a bid at a 50% premium to Entain’s current share price to involve a c.90% share component excluding an equity raise, or a c.60% share component including a c.US$3bn equity raise,” Citi said.
The broker pointed out MGM’s CEO said no “for now” to an Entain bid at 4Q22 results on February 8, meaning that position could be re-considered from August 8.
Shares were 1.1% higher at 1,313p while the FTSE 100 has slipped further, now down 32 points at 7,660.
10.20am: THG could buy City AM - Financial Times
Matt Moulding’s online retailer THG is in talks to buy London-based business newspaper City AM through a prepack administration, according to the Financial Times.
Sky also has the news adding it could be announced as soon as Wednesday afternoon, according to City sources.
One insider said THG was expected to pay "a small seven-figure sum" for City AM's assets including its brand and website, Sky reported.
City AM was put up for sale this month by its owners, who were seeking either an investment or a disposal after calling time on their involvement with the 17-year-old news group.
However, the most likely outcome now was a prepack administration, which would allow London-listed THG to acquire the group, according to two people familiar with the matter, the FT reported.
THG declined to comment, the FT said.
One person close to the process acknowledged that investors might question why a retailer was buying a newspaper, but said that there was a philosophical fit between City AM and Moulding.
Moulding has been scathing of the City since the company came to the market in 2020.
"The way we've been treated since joining the LSE has done nothing but add fuel to our insatiable fighting spirit," he said in May.
'It's certainly not an experience I'd recommend to anyone."
Perhaps CityAm will allow him to really let us know what he thinks.
9.54am: Departure of Alison Rose inevitable but a loss to the City
The departure of Alison Rose from NatWest following the row with Nigel Farage was inevitable but will be a loss, City commentators said today.
Banks “are trusted with our hard-earned cash and relied upon to fund a myriad of purchases from buying a house to business expansion which delivers jobs and prosperity,” said Danni Hewson at AJ Bell.
“With that in mind it now seems absurd that the board of NatWest had considered that Alison Rose could ride out this storm,” she added.
Hewson felt the decision to step down “was the only viable path.”
But “she will be a loss, having worked her way up the ranks and championed diversity and inclusion in the sector with a huge focus on getting more women in financial services,” Hewson stressed.
Victoria Scholar at interactive investor agreed pointing out: “as the first woman to take the top job at one of the big four UK banks back in 2019, this is a sad moment for female representation and means that the small handful of women leaders within FTSE 100 companies just got smaller.”
“But clearly her discussions with a journalist about Farage breach client confidentiality and mean her role as CEO is no longer tenable.”
Shore Capital’s Gary Greenwood said Rose’s behaviour was “inappropriate” and “inexcusable and clearly of greater concern regarding reputational damage.”
But he added this “is a very sad end to what had up to now been a productive period of leadership for Rose, during which the operational and financial performance of the group had significantly improved, albeit with the more recent help from a tailwind of rising interest rates.”
He has a buy rating on NatWest but thinks this situation is likely to cast a shadow over share price performance in the near-term.
9.33am: Lloyds' shares slip on first-half earnings miss
Shares in Lloyds Banking Group PLC (LSE:LLOY) fell following first-half results which missed expectations mainly due to rising impairment charges.
However, despite the fall commentators remained broadly positive on the outlook for UK’s largest lender.
Zoe Gillespie, investment manager at RBC Brewin Dolphin, said: “Lloyds has narrowly missed analyst expectations with its results, but the bank remains in a very strong position.”
“Although it has highlighted potential headwinds, Lloyds has also increased its guidance for the year, buoyed by an improving net interest margin, relatively limited impairment costs, and good asset quality,” she pointed out.
Shore Capital’s Gary Greenwood said the earnings miss was primarily due to higher-than-expected impairments and volatility charges.
He noted full year net interest margin and return on equity guidance have been upgraded but explained “the new levels are already captured in consensus, which may still edge down slightly given the Q2 miss.”
“We expect the market to be a little disappointed overall,” he said although he retains a buy rating on the stock.
At Jefferies, analysts described the numbers as “in line” and said overall the second quarter “ticks the boxes.”
“We do not see consensus moving materially on this print - some scope for higher non-interest income partially offset by higher operating lease depreciation,”
Richard Hunter at interactive investor, commented “Despite something of a slowdown in the second quarter as was largely expected, for the half-year as a whole Lloyds has again shown its financial mettle.”
“The second quarter slowdown has taken some of the shine from the bank’s recent progress, but the market consensus of the shares as a buy for the longer term is unlikely to be unduly affected,” he added.
Shares were 2.8% lower at 44.80p after earlier hitting a low of 43.71p.
9.13am: Rolls-Royce motors with upgrades to follow surprise update
Rolls-Royce Holdings PLC (LSE:RR.)’s share price soared 21% after raising guidance in a surprise trading update ahead of first-half results next week.
The FTSE 100-listed firm expects to report higher underlying operating profit of £660mln-£680mln, double the current consensus of £328mln, while free cash flow of £340mln-£360mln compares to the £50mln consensus.
Full-year guidance was also hiked with the firm now expecting underlying operating profit of £1.2bn-£1.4bn (consensus: £934mln) and free cash flow of £0.9bn-£1.0bn (consensus: £732mln).
Shore Capital Jamie Murray called the update “very encouraging,” and expects to upgrade EBIT forecasts by c20-40% in the current year.
He reckons upgrades for the following years are likely but will await speaking to the company.
The strong first half showing was “largely driven by improved performance in Civil Aerospace and Defence divisions,” he said.
Analysts at Jefferies agreed that Civil and Defence were the two main drivers of this guidance uptick, “thanks to higher volumes, cost efficiencies and pricing actions.”
Power Sytems is still expected to have lower margins in the first half which should improve in the second half as the impact of better contract pricing takes effect, expanding overall expected full-year margins, analysts at the broker said.
Both brokers have buy ratings on Rolls-Royce.
Shore’s Murray pointed out there remain “a number of other catalysts for the stock, including the H2 strategy day and the outcome of the SMR contract tender, leading us to reinstate our buy recommendation.”
Half-year results will be released on August 3.
8.55am: FTSE little changed as investors digest deluge of earnings
It’s a busy, busy day for earnings and updates. Away from the banks and Rolls-Royce for a moment and it has been a good day, so far, for British American Tobacco PLC (LSE:BATS).
Shares rose 3.1% after the London-based maker of cigarettes and vaping products saw its pretax profit rise sharply by 73% to £5.30bn for the six months that ended June 30 from £3.06bn a year before.
Revenue though was up just 3.7% to £13.34bn from £12.87bn, driven by New Categories, which made "good progress" towards the £5bn target by 2025.
But new boss Tadeu Marroco has warned investors not to expect “linear growth” in its new products division, even though it is on track to turn a profit next year.
The update dragged Imperial Brands Group 1.6% higher.
Heading the other was Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB) which fell 1.9% after it held guidance amidst a backdrop of challenging market conditions and uncertainty.
Revenue grew to £7.4bn in the first six months of the year, an 8.1% increase compared to the same period 12 months ago and 6% growth on a like-for-like basis.
In the second quarter, revenue was also up by 1.9% to £3.5bn, with like-for-like growth up 4.1%, the company said in a statement.
Meanwhile, the FTSE 100 is see-sawing around opening levels, now down 7 points at 7,685.
8.37am: Farage calls for new interim board at NatWest
The crisis at NatWest shows no signs of easing despite the resignation of chief executive Alison Rose.
Nigel Farage has called for a “cultural change” in banking as he called for the NatWest chair to step down and for the lender’s “lead investors . . . to put in place very quickly a new interim board”.
The former Brexit party leader told Sky News on Wednesday the changes would be justified after taxpayers bailed “these people out after their greed and stupidity back in 2008” .
Speaking on his employer GB News, Farage said: the government “needs to appoint a new temporary board to take control of this bank, and then what we need to do is, starting very early in the autumn, is to put in place legislation that says banks cannot and must not discriminate against customers.”
On Sky, Farage said Rose’s decision to step down was “a start” but Sir Howard Davies, the NatWest chairman, should “absolutely” resign.
He added that he believed Peter Flavel’s position as the chief executive of Coutts bank was no longer “tenable”.
The City minister Andrew Griffith said it was “right” that Rose had stepped down following weeks of controversy over Coutts’ decision to “de-bank” Mr Farage because of his political views.
Shares are 3.1% lower while the FTSE 100 has pushed into the green, up 5 points at 7,697.
8.14am: FTSE flat and NatWest falls as Rose quits
The FTSE 100 made a muted start on Wednesday with banks NatWest Group PLC (LSE:NWG) and Lloyds Banking Group PLC (LSE:LLOY) grabbing the headlines for different reasons while Rolls-Royce Holdings PLC (LSE:RR.) soared after raising guidance.
NatWest shares fell 3% after announcing the departure of its chief executive Dame Alison Rose after a row with former UKIP leader Nigel Farage.
Rose had admitted to a “serious error of judgment” in briefing a BBC journalist about the closure of Nigel Farage’s bank account.
Howard Davies, chairman of NatWest said the decision had been agreed “by mutual consent.”
Speaking to his employer GB News Farage said the government, being a “shareholder in this bank, along with other major investors, needs to appoint a new temporary board to take control of this bank.”
Elsewhere, Lloyds Banking Group PLC (LSE:LLOY) was also on the back foot, down 4%, despite raising guidance for the full-year and delivering a 23% rise in first-half profits.
Despite the growth, the £3.87bn figure was slightly below the £4bn average of analyst forecasts compiled by the bank.
Zoe Gillespie at RBC Brewin Dolphin, said: “Lloyds has narrowly missed analyst expectations with its results, but the bank remains in a very strong position.”
“Although it has highlighted potential headwinds, Lloyds has also increased its guidance for the year, buoyed by an improving net interest margin, relatively limited impairment costs, and good asset quality,” she added.
The profit jump is likely to reignite the row over whether banks are doing enough to reward savers.
Away from the banks and Rolls-Royce Holdings PLC (LSE:RR.) was a star performer with shares soaring 16% in early exchanges.
The FTSE 100-listed engineer has bumped up full-year guidance after reporting a strong first half on the back of a successful start to its transformation plan.
Operating profit came in between £660mln and £680mln during the first half, the FTSE 100 defence firm said in a statement, which was over double consensus expectations.
The company now anticipates full-year underlying operating profit of up to £1.4bn, up by approximately £400mln, alongside free cash flow of around £1.0bn – a £200mln hike.
Analysts at Shore Capital called the update “very encouraging.”
“We expect to upgrade our EBIT forecasts by c20-40% in the current year,” the broker said and suspects more modest upgrades will be encouraged by the firm further ahead.
7.52am: Rolls-Royce hikes guidance after transformation starts well
Another big name reporting today is Rolls-Royce Holdings PLC (LSE:RR.) which has bumped up full-year guidance after reporting a strong first half on the back of a successful start to its transformation plan.
Operating profit came in between £660mln and £680mln during the first half, the FTSE 100 defence firm said in a statement, which was over double consensus expectations.
“Despite a challenging external environment, notably supply chain constraints, we are starting to see the early impact of our transformation in all our divisions,” boss Tufan Erginbilgic said.
The company now anticipates full-year underlying operating profit of up to £1.4bn, up by approximately £400mln, alongside free cash flow of around £1.0bn – a £200mln hike.
7.47am: Lloyds raises guidance after strong first-half
Away from NatWest and industry rival Lloyds Banking Group PLC (LSE:LLOY) has raised its outlook for 2023 and boosted the dividend after delivering strong growth in first-half profits.
In the six months to June 30, the UK’s biggest mortgage lender reported pre-tax profit of £3.87bn, up 23% from £3.15bn a year ago, but slightly below the £4bn average of analyst forecasts compiled by the bank.
The strong growth helped the lender lift the dividend by 15% to 0.92p from 0.80p.
Underlying net interest income rose 14% to £7.00 billion from £6.14bn, with a net interest margin (NIM) of 3.18% up from 2.77% the year prior.
Lloyds said NIM was 3.14% in the second quarter, down 8 basis points compared to the first, given expected headwinds from mortgage and deposit pricing.
For 2023, the bank expects this to fall more slowly than previously forecast, easing to 3.10% this year instead of 3.05% while it predicts return on equity to be greater than 14% compared to 13% it had guided.
7.15am: NatWest boss Alison Rose resigns after Nigel Farage spat
NatWest Group PLC (LSE:NWG)’s chief executive Alison Rose has resigned after admitting to a “serious error of judgment” in briefing a BBC journalist about the closure of Nigel Farage’s bank account.
Howard Davies, chairman of NatWest said the decision had been agreed “by mutual consent.”
“It is a sad moment. She has dedicated all her working life so far to NatWest and will leave many colleagues who respect and admire her,” he added.
Paul Thwaite, the current CEO of the Commercial and Institutional business, will take over from Rose for an initial 12 months before a successor is appointed.
Rose has been under mounting pressure since Farage, the former leader of the UK Independence party, produced evidence that NatWest’s private banking business Coutts had decided to close his account partly because his political views went against its values.
She admitted this week that she had given a BBC reporter the impression that Coutts took the decision for solely commercial reasons.
The broadcaster apologised to Farage on Tuesday for an inaccurate report about why his account was closed.
Rose was appointed as Group Chief Executive in 2019, having worked at the bank for more than 30 years.
7.00am: NatWest boss quits, FTSE 100 seen lower
The FTSE 100 is expected to open lower as investors await a bumper crop of UK earnings while the US Federal Reserve makes its latest rate call after the market close.
BAT, GSK, Lloyds, Rio Tinto, Reckitt, Fresnillo are just some of the names updating investors on Wednesday, the busiest day so far of the UK reporting season.
Spread betting companies are calling London’s blue-chip index down by around 20 points after closing up 13.21 points at 7,691.80 on Tuesday.
Alongside Lloyds Banking Group, another bank in focus is NatWest Group PLC (LSE:NWG) after its boss Dame Alison Rose resigned after she admitted to a "serious error of judgment" in discussing Nigel Farage's relationship with private bank Coutts, owned by NatWest Group, with a BBC journalist.
Rose will leave the bank, whose biggest shareholder has been the UK government since a taxpayer bailout in the 2008 financial crisis, with immediate effect, NatWest said. She has worked there for more than 30 years and became chief executive in 2019.
In the US, markets advanced ahead of the US rate call where a 25 basis point rise is all but nailed on.
Results after the closing bell from Microsoft and Alphabet were mixed. Microsoft shares fell although revenue and earnings beat expectations, the company reported a decelerating demand for its cloud computing services to 26% from 27%.
But Alphabet rose after results topped expectations driven by strong advertising.