Lloyds Banking Group will be one of many FTSE 100 firms that is pleased 2018 is over. After quickly rushing to an 8 month high of 72.5p late last January, the Lloyds share price went on a truly dreadful run, one that culminated in a 2 and a half year low of 49.53p by the end of December.
So far 2019 has been kinder to the company. A sharp rise across January has left it bouncing between 57p and 58p throughout the first half of February. Lloyds share price now sits at 58.3p.
Though its third quarter pre-tax profit fell 7% to £1.817 billion, that figure was nevertheless a lot better than the £1.7 billion forecast by analysts. And for the first 9 months of the year its pre-tax profit performance was much stronger, with a 10% increase to £4.93 billion. As for net income, it rose 2% for both Q3 specifically and the 9 months ending 30th September.
Interestingly, unlike peer RBS, which during the same earnings season revealed it had set aside £100 million for Brexit uncertainty, Lloyds was far more optimistic about the whole situation. Retiring CFO George Culmer said the bank’s ‘continued expectation is for some kind sort of withdrawal agreement going forward’, also stating that 97% of the firm’s business is UK-focused.
Given how things have panned out since that update, investors can perhaps expect a fuller comment on Brexit on Wednesday. Lloyds hasn’t completely sat on its hands, however; in January it secured a banking license for its Berlin subsidiary.
As for the results themselves, investors will be keen to see that Lloyds avoided another drop in pre-tax profit in the fourth quarter after Q3’s plunge, alongside its forecasts for what is likely to be an even more Brexit-dominated financial year.
Lloyds shares have a consensus rating of ‘Buy’ alongside an average target price of 73.88p.
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