Richard Hunter, head of research at Wilson King Investment Management, sees Lloyds Banking Group (LON:LLOY) as a “proxy for post-Brexit Britain” – and he’s pretty pessimistic on the outlook for the lender.
“There has been a limited impact on actual numbers [of Brexit],” Hunter said in the wake of third-quarter results.
“The impact has been more on sentiment for Lloyds, but we may well see the going get tougher.”
Earlier Lloyds said it set aside another billion quid to cover potential pay-outs relating to the payment protection (PPI) insurance mis-selling scandal.
The PPI provision reduced reported profit before tax to £811mln in the third quarter from £958mln in the same period of last year.
Underlying profit, which excludes the PPI provision and other one-off items, eased to £1.91bn from £1.97bn the year before.
Net interest income held steady at £2.85bn versus £2.86bn the previous year.
“It is the hardest hit of the UK banks [by PPI]. One would hope they are absolutely correct that this will represent the final provision.”