London, January 12, 2026, 09:38 (GMT) — Regular session
- Lloyds Banking Group shares slipped in early London trading, following a broader dip in bank stocks
- Sentiment in the sector has taken a hit following a proposed U.S. cap on credit-card interest rates
- Lloyds plans to release its preliminary 2025 results on Jan. 29
Lloyds Banking Group plc (LLOY.L) shares edged lower in early London deals Monday, dragged down by another round of risk-off selling targeting banks. The stock fell roughly 0.2% to 100.1 pence. (Investing)
The timing is crucial. Lloyds, heavily exposed to UK mortgages, is among Britain’s most rate-sensitive banks. The question of where borrowing costs head next has gained urgency after a volatile start to the year. The Bank of England’s policy rate currently sits at 3.75%. (Bank of England)
It arrives as investors hunt for a fresh catalyst. With earnings season looming and politics shaking up markets, bank stocks are increasingly reacting to macro news instead of branch-level specifics.
In Europe, banks led the STOXX 600 lower, sliding 1.1% in early trading following U.S. President Donald Trump’s announcement of a one-year cap on credit-card interest rates at 10%, set to begin Jan. 20, though details on enforcement remain unclear. Barclays tumbled 4.5%, while HSBC slipped roughly 1%. (Reuters)
Washington’s tone is sparking deeper concern. Andrew Lilley, chief rates strategist at Barrenjoey, commented after Fed chair Jerome Powell revealed the administration had threatened him with a criminal indictment: “Trump is pulling at the loose threads of central bank independence.” (Reuters)
Rate forecasts are shifting once more. J.P. Morgan now predicts the Fed will hike rates in 2027, while Barclays and Goldman Sachs have delayed their first rate-cut expectations to mid-2026, following signs of a strong labor market. (Reuters)
Lloyds is facing a governance issue behind the scenes. According to The Guardian, the bank is working on a new three-year executive pay policy that could raise CEO Charlie Nunn’s maximum package from £9.1 million to £13.2 million, following the UK’s removal of the cap on banker bonuses. A Lloyds spokesperson said the proposals aim to “reflect market developments and regulatory changes” while maintaining a clear link between performance and reward. (The Guardian)
Investors will digest the next batch of key figures on Jan. 29, as Lloyds plans to release its preliminary results for 2025. Traders are focused on the net interest margin—the difference between the bank’s earnings on loans and its costs on deposits—and any signals about capital returns. (Lloyds Banking Group)
But the setup works both ways. If regulators tighten their stance or rate cuts arrive sooner than expected, bank earnings could slide sharply—even without a spike in bad loans.
