Lloyds Banking Group (LON:LLOY) will raise interest rates on some of its savings accounts, Reuters reported. The move came after the Bank of England (BoE) recently raised its key interest rate.
The Lloyds share price slipped slightly in today’s meeting after falling 0.28 per cent to 61.21 pence at 10:30am BST. The share underperformed the broader UK market, with the FTSE 100 benchmark index moving into positive territory and currently 0.11 per cent higher at 7,650.71 points. The Group’s shares lost more than five percent of their value last year, while the Footsie gained about four percent.
Lloyds wants to raise some rates
Reuters reported yesterday that a Lloyds spokeswoman said the lender would raise interest rates on a number of its fixed and floating rate savings accounts at the end of the month. The bank’s decision includes interest rate increases of 0.5 percent for individual savings accounts (ISA) and 0.7 percent for fixed-rate accounts, with the change expected to affect millions of savers.
The move follows the BoE’s decision to raise interest rates beyond their lows in the financial crisis earlier this month, with the bailed-out lender being the first of the UK’s “Big Four” banks to confirm that it will pass the move on to savers. The news channel notes that Lloyds and FTSE 100 lender Barclays (LON:BARC) had already announced that they would raise some of their lending rates as a result of the central bank’s decision.
Analysts on lenders with bailouts
Goldman Sachs, which considers Lloyds a “sell”, set a target price for the shares of 56 pence last week. According to MarketBeat the bailed-out lender currently has a consensus “hold” rating and an average target price of 74.90 pence.
UBS lowered its price target for Lloyds last week, indicating lower trading multiples of the peer group in its sum-of-the-parts valuation.
On Tuesday 14 August at 10:47 BST, the Lloyds Banking Group share price was 61.20 pence.