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Lloyds Banking Group (LON:LLOY) is expected to publish an ‘uneventful set of numbers’ in its third quarter (Q3) earnings report on Thursday, according to a note by UBS analysts.
Analysts at the Swiss investment bank estimate Lloyds will report pre-tax profit of nearly £1.96 billion, which will represent a slight decline to the £2.08 billion the bank generated during the same period a year ago.
‘LBG is, in our view, an undervalued, strongly capital generative bank, operating with a cost advantage in a competitive market and with decent medium-term growth opportunities in lending, savings, investments and general insurance,’ UBS analysts said.
Lloyds-Schroders £80 billion wealth management tie-up
Most analysts say that there will unlikely be further PPI provisions this quarter, with the bank likely to stress its wealth management proposition after it announced its £80 billion tie-up with wealth manager Schroders on Tuesday.
Under the new agreement, Lloyds will transfer the bulk of its £109 billion in assets to Schroders, with the two looking to launch a joint venture that will offer financial planning and retirement services to its wealthier customers.
The deal will see Lloyds gain access to Schroders superior technology platform and financial advisers, while the wealth manager will be able to reach a much larger set of customers.
Lloyds plans £2 billion share buyback
The UK lender is expected to announce plans for a £2 billion share buyback scheme in its results on Thursday, according to a report by the Financial Times.
If true, the news is a sign that its management is confident in the direction the bank is heading at a time when the UK economy faces a myriad of economic headwinds and ongoing uncertainty surrounding Brexit.
The bank is also likely to reveal further restructuring plans, with Lloyds looking to close down a number of its high-street branches and deploy the capital saved into investing in further digitisation efforts at the bank.