- Summary:
- Lloyds Bank share price has risen strongly once again as the prospect of UK treasury's intervention in car miss-selling case adds propulsion.
Lloyds Bank share price gapped up in Wednesday’s trading session, as it traded at 61.76 at the time of writing with 1.2% in intraday gains. The stock’s upside is propelled by renewed investor confidence that it could surmount the damage caused by the car mis-selling scandal. The stock has been on an upward trajectory since January 13th and has gained more than 11% year-to-date.
The UK government has initiated steps to cushion lenders from the car financing scandal that could cost them as much as £30 billion in compensation claims. The case is headed to the Supreme Court where it will be heard in April. The country’s Appeals Court ruled last year that it was illegal for lenders to have commission agreeements with car dealers and pass the cost to borowers without their knowledge.
Lloyds Bank share price has been subdued since the Financial Ombudsman led borowers to win the case against UK banks in October 2024. UK treasury minister Rachel Reeves has made the unusual step to intervene as the government views the size of compensation claims as potentially deleterious to the UK’s reputation as an investment hub.
About 80% of new car purchases in the UK are financed through loans, and Lloyds Bank (LSE: LLOY) is the country’s largest lender via its Black Horse subsidiary. The momentum created by the treasury’s intervention will likely keep Lloyds share price on the ascending trajectory in the near-term.
Despite being in the eye of the car-mis-selling storm, Lloyds Bank is still one of the UK’s most profitable companies. It reported £2.727 billion in profit after tasx in the fisrt nine months of 2024. Therefore, investors are unlikely to be under selling pressure in the coming weeks.
Lloyds Bank Share Price Prediction
The momentum on Lloyds Bank share price signals a likely continuation of the upside. The pivot is at GBX 61.12, and immediate resistance is likely to be at GBX 62.10. A stronger momentum could break above that level and potentially test GBX 62.74.
On the downside, breaking below GBX 61.12 will favour the sellers to be in control. That is likely to send LLOY to the first support at GBX 60.36. However, a stronger momentum could break below that level and invalidate the upside narrative. Also, that could send the stock lower to test the second support at GBX 60.00.
