Lloyds Banking Group (LON:LLOY) is expected to deliver another strong set of quarterly figures on Thursday in a further nod to its turnaround efforts under chief executive Antonio Horta-Osorio.
The lender’s second quarter earnings mark its first set of results since being returned to private hands and follow a robust first quarter that saw the group double its profits.
Following a successful recovery, the government sold the last of its stake earlier this year after its bailout during the 2008-09 financial crisis.
“Given recent government share sales, coupled with the doubt cast over the UK economy by Brexit, it’s something of an accomplishment that Lloyds stock is only a couple of pence shy of the price it stood at on referendum day last June,” according to Hargreaves Lansdown.
Analysts at Morgan Stanley expect Lloyds to continue to show growth in the second quarter, pencilling in a 13% increase in bottom-line profits to £2.9bn.
The net interest margin is forecast to reach 2.82%, including the benefit from the bank’s acquisition of credit card business MBNA in May.
However, Lloyds is still dealing with the ghosts of its past, setting aside cash for its payment protection payment insurance mis-selling scandal and for compensating victims of the HBOS Reading fraud.
Lloyds has missed its own deadline at the end of June to make compensation payments to those who suffered significant losses from the fraud, which involved siphoning off money from struggling businesses.
TV Noel Edmonds is among the victims and yesterday raised his compensation claim to £300mln, three times more the amount Lloyds has set aside.
Any update on this debacle will be closely followed. How it responds to the latest move by the Bank of England to raise the requirements for countercyclical capital buffers up to 0.5% from zero will also be under the microscope.
The dividend will be another key focus after Lloyds announced a special dividend at its full year results in February.
Royal Dutch Shell to report improved second quarter earnings
Lloyds joins a tidal-wave of companies reporting their results.
Royal Dutch Shell is one of them with the oil giant expected to report a net income of $3.5bn for the second quarter, compared with a profit of $1.2bn in the same period a year earlier.
The company is likely to get a lift from a pick-up in oil prices, which rose an annual rate of 10% in the second quarter, as well as from strong margins in refining and chemicals.
Significant announcements out:
Interims: Anglo American PLC (LON:AAL), AstraZeneca PLC (LON:AZN), British American Tobacco plc (LON:BATS), Burford Capital PLC (LON:BUR), Foxtons PLC (LON:FOXT), Inchcape PLC (LON::INCH), Indivior PLC (LON:INDV), Intu Properties PLC (LON:INTU), Impellam Group PLC (LON:IPEL), Just Eat PLC (LON:JE.), Lloyds Banking Group PLC (LON: LLOY), Lancashire Holdings PLC (LON:LRE), Primary Health Properties PLC (LON:PHP), Royal Dutch Shell PLC (LON:RDSA, LON:RDSB), RELX (LON:REL), Schroders PLC (LON:SDR), Smith & Nephew PLC (LON:SN.), Greencoat Wind UK PLC (LON:UKW), Vesuvius Plc (LON:VSVS), Weir Group PLC (LON:WEIR)
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