Lloyds Banking Group PLC (LSE:LLOY) has seen its share price target bumped lower by Goldman Sachs analysts as uncertainty around motor finance mis-selling continues to loom.
Despite news this week that the Supreme Court would hear an appeal against cases around hidden commissions in motor finance deals, Goldman said it was unclear how the issues would play out.
“Altogether, we see a marginally slower timeline and greater range of uncertainties compared with our previous update in November,” analysts said in a note.
Lloyds' 12-month share price target was moved from 64p to 63p as a result.
Goldman highlighted that Lloyds hadn’t laid out a provision since the Court of Appeal’s case in October opened the door for higher potential compensation from lenders.
Though this was indeed the case being appealed, it had stretched to other secret commission payments between lenders and motor finance sellers beyond those under investigation by the Financial Conduct Authority in its probe of the sector.
“While we take no view on the ultimate outcome of the motor finance commission matter or the size of the potential remediation charge, we continue to see uncertainty,” Goldman said.
The outcome of the Supreme Court appeal would be key, the bank added, alongside the FCA’s own decision in its study into historic non-discretionary commission arrangements.