Halifax sales to boost first quarter profits for Lloyds on Wednesday
Lloyds Banking Group is on track to post another healthy rise in profits on Wednesday after a solid first quarter, boosted by strong sales at the Halifax.
Analysts at UBS are pencilling in a nine per cent increase in underlying pre-tax profits to £2.3bn for the three months to March 31 and bottom line profits are expected to rise 40 per cent to £1.8bn.
Lloyds’ chief executive Antonio Horta-Osorio will be asked for his views on the impact of an expected rise in interest rates – something of a double-edged sword for retail banks.
The Bank of England is expected to increase rates from 0.5 to 0.75 per cent in May, potentially with another hike later this year to bring inflation back to target.
While higher interest rates mean higher retail profit margins for lenders like Lloyds, it may also dampen the housing market and demand for mortgages.
The figures will also be eyed closely for any further cash set aside for the payment protection insurance (PPI) saga, in particular following Clydesdale and Yorkshire banking group CYBG’s recent move to put by an extra £350m following a recent surge in claims ahead of the complaints deadline.
With Lloyds having only just added £600m for the mis-selling scandal for the previous quarter – taking its overall bill to £18.7bn –it is thought unlikely that another hefty hit will be revealed.
The figures also come just a week after the banking firm’s latest jobs cull, with 1,230 roles axed under plans to shut 49 branches nationwide.
It pledged to create 925 roles elsewhere in the business, saying the net reduction was 305, as it focuses on investment in technology and digital banking under its new three-year strategy.