By Elena Vardon

Lloyds Banking Group is scheduled to report results for its fourth quarter on Thursday. Here is what you need to know:

PRETAX PROFIT: The U.K. bank is expected to post a pretax profit of 1.25 billion pounds ($1.57 billion) for the three months ended Dec. 31, according to a company-compiled consensus based on 18 analyst models. This compares with 1.775 billion pounds reported for the same period a year earlier.

NET INCOME: The FTSE 100-listed lender is expected to post net income for the period of 4.34 billion pounds, slightly higher than the 4.23 billion pounds it reported in the year-earlier period. Net interest income is expected to slip to 3.25 billion pounds against last year's 3.32 billion pounds but be roughly flat compared with the third quarter.

Shares in London fell 6.8% over the fourth quarter. They trade at around 63 pence ahead of the results and have gained close to 15% since the start of the year.

WHAT TO WATCH

-- Consensus expects banking net interest margin--the difference between what lenders earn on loans and pay out on deposits--to edge up to 2.97% for the fourth quarter, from 2.95% in the third quarter. This should reflect the benefits from slower-than-expected rate cuts by the Bank of England and from the structural hedge--the balance-sheet exercise banks undertake to reduce their sensitivity to interest-rate moves--which should offset mortgage-refinancing headwinds.

-- The London-listed bank's 2025 guidance for key metrics will also be in focus. UBS analysts expect the lender to reiterate its 2026 targets of a return on tangible equity of more than 15% and 1.5 billion pounds in incremental revenue. "We'll focus on volume growth across corporate lending and mortgages and look forward to insights from Lloyds on how they foresee demand for these segments throughout the year," Morningstar analyst Niklas Kammer said, noting housing affordability remains a pressing issue.

-- The market will be looking out for any updates on the motor-finance case linked with historical car dealer commissions in light of Monday's news that the U.K. Treasury won't be allowed to intervene in the upcoming Supreme Court ruling. The bank, which is the U.K.'s largest motor-finance player through its Black Horse brand, has already set aside 450 million pounds for a potential redress. Uncertainty around the final cost remains significant and investors worry that a worst-case scenario outcome could impact decisions on investments and capital distribution to shareholders. Analysts at Citi don't expect a further provision at this stage.

U. 

-- In terms of shareholder returns, consensus pencils in a 2.03 pence per share final dividend--bringing the full-year payout to 3.09 pence--as well as the announcement of a 1.70 billion pound share-buyback program.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

February 19, 2025 07:18 ET (12:18 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.