Lloyds Banking Group PLC (LSE:LLOY) is due to report its results for the third quarter tomorrow (Wednesday) morning.
If the results from peer Barclays today are anything to go by it might be tin hat time, but the problems at its rival look merchant bank-related and for Lloyds that is not an issue as it doesn't have a significant investment arm.
It is very UK-focused and on mortgage lending in particular.
UBS analysts are forecasting that Lloyds will have delivered £1.73 billion of underlying profit before tax (PBT) for the quarter, adding that now could be a time to buy shares in the banking group.
The equity analysts said the bank’s net interest margin of 3.14% fell eight basis points in the second quarter after the bank faced higher deposit costs and mortgage margin pressure.
Lloyds is expected to generate “stronger hedge income” in the second half of the year, though that could be offset by mortgage margin pressure and deposit churn, said the note.
Analysts at Jefferies said this month that they expect Lloyds could surprise the city with a £500 million share buyback on results day.
Citibank recently picked Lloyds as the favourite among the crop of banks operating in the UK, expecting that a revival over time could be sparked as and when interest rates are cut.
Time will tell whether the bank’s decision to welcome former UKIP leader Nigel Farage as a bank account client will have any impact on its reputation or bottom line.
Shares were down 2.3% today as investors were taking no chances after the Barclays shock