Lloyds kicks off sector update amid high court case

Photo: Dominic Lipinski/PA Wire

Photo: Dominic Lipinski/PA Wire - Credit: PA

Lloyds Banking Group is expected to unveil a rise in profits this week as it kicks off a trio of third quarter results in the sector, as a high-profile court case against the lender continues.


A consensus of City analysts forecast the lender will book a £1.6 billion pre-tax profit, nearly double last year’s figure of £811 million, which was dragged down by payment protection insurance (PPI) provisions.

Underlying profit for the period is expected to nudge up from £1.9 billion to £2 billion.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “We’re not expecting any surprises from Lloyds this quarter.

“Steady income growth should continue, which combined with a market-leading cost-to-income ratio has kept underlying profits moving forwards in recent years.”

But its trading update comes as the bank and former bosses face accusations in court from shareholders that they were “mugged” during the takeover of Halifax Bank of Scotland in 2008.

A group of more than 5,800 former Lloyds TSB shareholders are suing Lloyds, former chairman Sir Victor Blank, ex-chief executive Eric Daniels, former chief financial officer Tim Tookey, one-time director of retail banking Helen Weir, and ex-director of wholesale banking George Truett Tate.

Most Read

Lloyds is vigorously denying these claims, but the case is likely to see former bosses appear in court to give evidence.

Meanwhile, its update will be scrutinised for signs of a rise in bad loans as warnings ramp up over ballooning levels of personal debt.

It will also be eyed closely for any further cash put aside for the PPI mis-selling scandal after it took another £1.05 billion hit in its first half.

Lloyds is not the only player under pressure over past actions, with rival Royal Bank of Scotland (RBS) due to report its figures on Friday amid an ongoing furore over a leaked report by the City Watchdog into the bank’s mistreatment of small business customers.

Barclays reports on Thursday, with investors looking for an improvement after it plunged to a half-year loss after booking extra compensation costs and a £2.5 billion hit from the sale of its Africa arm - driving the lender to an attributable loss of £1.2 billion over the six-month period.