Reports that Lloyds Banking Group PLC (LSE:LLOY) is to be whacked with a billion-pound tax bill were played down by analysts on Thursday.
The Financial Times reported that the high street lender is set to be "hit with a £1 billion tax bill after legal challenge fails".
Analysts at Citi noted this is part of a long-running discussion with HMRC since 2013, which Lloyds has always referenced in its annual accounts, "and for which no provision has been made, as Lloyds still expect to eventually win the case".
The FTSE 100-listed lender will now appeal the ruling of the first tier tax tribunal to the Upper Tribunal, and should that fail, then has the opportunity to take this to the Supreme Court.
"So any final decision on this is likely to take a prolonged period of time," the Citi analysts said, also pointing out that this latest verdict came almost two years after the case was heard.
For reference, though, the investment bank estimated that "should Lloyds (eventually) lose" there would be a hit of around 4% hit to Lloyds' tangible net asset value and circa 40 basis points to its CET1 capital ratio.
Citi has a 'neutral' rating on the shares.