Profits are largely unchanged year-on-year, but the 3% share price sell-off tells us Lloyds Banks' (LON:LLOY) very patient investors aren’t pleased.
At a few points during the quarter to the end of September, there have certainly been grounds to fear that underlying profit would slide below the £1.97bn level booked in Q3 last year.
However we notice consensus in recent weeks had been inching well above the £1.912bn underlying net income the group has reported.
Hopes have been rising that the absence of a clear structural economic hit and (probably) delayed fallout from the collapse of the pound would mean a relatively unhindered LBG performance in Q3.
In the event, comparable profits look as much as 9.3% light of the typical City forecast, and 3% weaker than the ‘flat’ view.
Furthermore, there’s no additional announcement of self-help (also known as cost measures) having taken place within the bank during the quarter, even if we recognise that management probably thought it prudent to hold fire whilst the dust to settled, and to keep a rein on sentiment.
Lloyds’ CFO Culmer has simply pledged this morning that “there is more to come”.
Perhaps the most positive note is the signal from the group’s CFO that its latest PPI provision of £1bn is the final one the bank expects to take given that it is intended to cover the period up until the recently pushed-back deadline.
In the meantime of course, it is that very payment which has taken a big bite out of profits and, potentially, prevented Lloyds from taking as much advantage as possible from what still looks set to be a delayed hit from the referendum outcome.
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