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Will Lloyds' share price returns continue after Q1 results?

Lloyds share price: the Lloyds Banking Group logo hanging outside a branch of the bank

The Lloyds [LLOY] share price has continued its slow move back towards pre-pandemic peaks above the 50p level, after outgoing CEO Antonio Horta-Osorio signed off with a decent set of results at the end of the last quarter.

Lloyds share price continues steady recovery

Lloyds Banking Group's share price is currently up a healthy 39% from a year ago, in what has been a gradual and at times choppy recovery, which is understandable in the face of the challenges set by the global pandemic. Lloyds’ shares hit a 52-week low at 23.5p on 22 September, as the onset of the coronavirus second wave became clear, and the UK government announced a return to stricter lockdown regulations. Since that low, the share price has climbed an even more impressive 81%, and currently sits above 42.5p during the trading session on Monday 26 April.

Though Lloyds numbers still have some way to go, its Q4 figures were encouraging despite concerns about how the current lockdown might affect its non-performing loan provisions, especially after the bank revised its loan loss provision lower in its third quarter results.

These concerns proved to be wide of the mark, after Q4 provisions increased by £128m, taking the total set aside for 2020 to £4.2bn. While statutory profit was impacted by the effects of the pandemic and declined 54%, it still came in at a respectable £1.54bn.

Net interest margins, while also lower, also showed signs of picking up and expectations were for them to remain steady above 240 basis points over the next 12 months.

What’s next for Lloyds share price?

With the dividend also being reinstated and the outlook for this year becoming more positive, we could start to see some of the provisions that were set aside last year being added back, if the economy proves to be more resilient than initially projected.

US banks have already started down this road, and while UK banks might be more hesitant, we should still see better results given the recent rise in longer-term treasury bond yields, which have improved lending margins. Loan demand is also likely to be a key bellwether of business confidence.

The Lloyds share price has a consensus ‘buy’ rating according to MarketBeat, with 12 analysts rating the stock a buy, along with one sell and one hold rating. The analysts’ have put a price target of 43.4p on the shares, up from 40.9p a month ago.

How will Lloyds’ share price react when the FTSE 100 banking giant releases its Q1 results at 7am on Thursday 22 April?

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