Lloyds share price subdued ahead of lender’s half-year results

Shares in Lloyds Banking Group (LON:LLOY) have lost ground in today’s session, ahead of the company’s half-year results tomorrow. Analysts expect a rise in profit before tax as well as higher income, following the inclusion of the first month of earnings from the lender’s recent purchase of credit card business MBNA.

As of 09:33 BST, Lloyds’ share price had lost 0.20 percent to 68.66p, underperforming the benchmark FTSE 100 index which has added 0.66 percent to stand at 7,484.04 points. The group’s shares have added more than 26 percent to their value over the past year, and are up by just under 10 percent in the year-to-date.

Lloyds is scheduled to posts its half-year results tomorrow and City A.M. reports that Investec expects the lender’s profit before tax to come in at £2.9 billion for the period, with the group paying £1.6 billion in dividends, or 1p per share. Interactive Investor meanwhile notes that Deutsche Bank reckons that Lloyds’ recent MBNA purchase will contribute £55 million of income and around £25 million in pre-tax profit, benefitting net interest margin by three basis points.

Lloyds, which was returned to full private ownership earlier this year, however, is also expected to book a hefty charge for mis-sold payment protection insurance, as the Financial Conduct Authority set an August 2019 deadline for customers to file complaints over the PPI scandal.

In ratings news, Citigroup reiterated its ‘sell’ stance on Lloyds last week, without specifying a valuation on the stock. BNP Paribas also remains bearish on the FTSE 100 lender with an ‘underperform’ rating and a price target of 63p. According to MarketBeat, Lloyds currently has a consensus ‘buy’ rating and an average valuation of 74.78p. 

As of 10:05 BST, Wednesday, 26 July, Lloyds Banking Group share price is 68.61p.