Rise in profits expected for Lloyds

Lloyds Banking Group is expected to unveil a rise in profits next week as it kicks off a trio of third quarter results in the sector, as a high-profile court case against the lender continues.

A consensus of City analysts forecast the lender will book a £1.6 billion pre-tax profit, nearly double last year’s figure of £811 million, which was dragged down by payment protection insurance (PPI) provisions.

Underlying profit for the period is expected to rise from £1.9bn to £2bn.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “We’re not expecting any surprises from Lloyds this quarter.

“Steady income growth should continue, which combined with a marketleading cost-to-income ratio has kept underlying profits moving forwards in recent years.”

But its trading update comes as the bank and former bosses face accusations in court from shareholders that they were “mugged” during the takeover of Halifax Bank of Scotland in 2008.

A group of more than 5,800 former Lloyds TSB shareholders are suing Lloyds, former chairman Sir Victor Blank, ex-chief executive Eric Daniels, former chief financial officer Tim Tookey, one-time director of retail banking Helen Weir, and ex-director of wholesale banking George Truett Tate.

Lloyds is denying these claims, but the case is likely to see former bosses appear in court to give evidence.

Meanwhile, its update will be scrutinised for signs of a rise in bad loans as warnings ramp up over ballooning levels of personal debt.

Lloyds is expected to book a £1.6bn profit in the third quarter.