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23 Feb 2021 | 11:28

Wednesday preview: Lloyds Banking Group in the spotlight

(Sharecast News) - The flow of economic data is scheduled to slow in the middle of the week with the spotlight expected to fall on a final reading for German gross domestic product in the last three months of 2020.

Economists anticipate that the Federal Office of Statistics will confirm a previous preliminary print of 0.1% growth quarter-on-quarter, but will nevertheless be keen for a detailed breakdown of activity by sector.

Stateside, the spotlight will be on new home figures for January.

Federal Reserve boss Jerome Powell meanwhile is due to testify before a US congressional panel for a second day, although it is exceedingly unlikely that his comments on policy will diverge from the prior day's.

No major economic reports are scheduled for release in the UK.

Across the globe, overnight rate-setters in New Zealand are due to meet to decide on policy.

Consensus is that the target level for the Royal Bank of New Zealand's official cash rate will be kept at 0.25%.

Lloyds Banking Group is expected to report a substantial drop in full-year growth at the top line level when compared to a year before.

In quarter-on-quarter terms on the other hand, profitability is expected to have remained roughly stable, said UBS analyst Jason Napier.

Napier had penciled-in a 1% dip in net interest income for the three months to 31 December when compared to the prior three-month stretch.

Compared to the year before on the other hand income was seen down by 16%.

"With a solid balance sheet and good free cashflow generation capabilities we remain Buyers," the analyst said in a research note sent to clients on 19 February.

Some uncertainty around Lloyds' long-term strategy was expected to resists beyond its results and ahead of the arrival of its new boss, Charlie Nunn, later in the first half of 2021.

Notwithstanding, said Nunn, "with costs under good control and a low comparative base for revenues set in 2020 we think the firm has the potential to offer attractively valued gearing to a recovering UK post COVID 19."



Lloyds Banking Group, Petrofac Ltd., Telecom Egypt SAE GDS (Regs), Georgia Capital


Town Centre Securities, Haydale Graphene Industries, Netcall


Georgia Capital


Paragon Banking Group, Bankers Inv Trust, Electra Private Equity, Gooch & Housego


Dewhurst (Non-Voting), Dewhurst


BRC Shop Price Index (00:01)


Gross Domestic Product (GER) (07:00)

MBA Mortgage Applications (US) (12:00)

New Homes Sales (US) (15:00)

BRC Shop Price Index (00:01)

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