Analysts at UBS expect Lloyds Banking Group (LON:LLOY) to set aside further provisions for payment protection insurance (PPI) and other restructuring costs when it updates investors on its interim performance next week, Proactive Investors reports. The comments came after Berenberg reaffirmed the bailed-out lender as a ‘sell’ this week, naming it as one of the riskiest UK banks.
Lloyds’ share price has inched higher in London in today’s session, having added 0.19 percent to 62.68p as of 14:39 BST. The stock is marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.50 percent higher at 7,701.25 points. The lender’s shares have given up a little over seven percent of their value over the past year, as compared with about a 3.5-percent gain in the Footsie.
UBS flags more PPI costs
Lloyds is scheduled to update investors on its half-year results on Wednesday and Proactive Investors reports that analysts at UBS expect the company to report statutory pre-tax profit of £887 million for the second quarter, including £410 million for PPI provisions, £262 million in restructuring costs and a £110 million loss on the disposal of its Irish residential mortgage portfolio.
Investors will also eye any Brexit-related updates after it recently emerged that the company was planning to operate three subsidiaries in continental Europe after Britain leaves the European Union.
Lloyds share price performance
Chris Beauchamp, market analyst at IG, meanwhile said in a note ahead of Lloyds results that the lender’s “shares are in an ascending triangle as they look to break above 64p and challenge the downtrend line from the 2018 high”. He further noted that a break about the 64p-level would open the way to 65p, “while a close below 62p would suggest a further decline towards 60p”.