Lloyds share price: 4 things to watch out for in its half-year results
The UK lender unveils its half-year results on Wednesday, with its share price continuing to be hampered by weaker consumer lending and the prospect of a no-deal Brexit.
Lloyds Banking Group is set to unveil its half-year results on Wednesday, with analysts expecting a relatively stable performance, though its share price continues to be weighed down by consumer lending and no-deal Brexit concerns.
IG looks at some of the key things to watch out for ahead of its half-year results.
Analysts expect decent half-year performance
Lloyds is expected to report pre-tax profit of £4.3 billion, up from £3.1 billion a year earlier, while revenue is expected to rise to £9.4 billion.
However, the bank’s first quarter results will likely still be on the minds of many investors after revealing flat revenues and showed the lender remains burden by a rise in bad loans on its balance sheet.
Lloyds contends with weakening consumer lending
The British lender continues to contend with weakening consumer credit growth, which poses a major challenge to Lloyds and the wider UK banking sector.
However, the bank’s mortgage growth remains promising and has been able to offset weaker demand for consumer credit to a certain degree.
Practise trading Lloyds and other UK banking stocks with an IG demo account.
Lloyds continues with cost-cutting measures
The bank continues with its cost-cutting and capital management plans, which are designed to lift the bank’s return on tangible equity (ROTE).
At the least, this strict approach to cost control will help lessen the weakening of consumer loan growth, although it will be unable to counter it entirely.
No-deal Brexit threatens to hurt UK lenders
Lloyds and its rivals in the UK banking sector remain fearful about the prospect of a no-deal Brexit -something that has become more likely since the appointment of Boris Johnson as the new British prime minister.
In the event of a no-deal departure from the EU, Lloyds will likely see a sharp decline in loan rates and larger impairment fees for the bad loans on its books as the wider UK economy is expected to struggle in the near-term.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
See an opportunity to trade?
Go long or short on more than 17,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
