Shares in Lloyds Banking Group were up on the FTSE 100 ahead of the group's third quarter results, expected tomorrow.
In August the bank reported a return to profit, thanks in part to lessening bad debt provisions and improved conditions for its Consumer Banking and Commercial divisions.
The group, which is still 40 per cent owned by the British government, has also been actively cutting costs and jobs since it was bailed out by the taxpayer.
Keith Bowman, analyst at Hargreaves Lansdown, said of tomorrow's announcement, "Bad debt provisions are likely to have been reduced further, whilst an update on cost savings generated via the acquisition of HBOS could be provided. However, on the downside in the wake of recent provisions made by Bank of America for its MBNA credit card division, charges in relation to regulatory changes for the selling of Payment Protection Insurance (PPI) could be detailed.
"With the bank enjoying an approximate 40% share of this market between 2006 and 2008, provisions of around £1 billion could be seen, although this may be spread over a five year period. Recent changes to capital cushion requirements could also see management downplaying any near-term return to dividend payments. Nonetheless, ahead of the update and with the UK economy currently surprising on the upside, market consensus opinion currently denotes a buy."
By 16:05 shares in Lloyds Banking Group were up 0.96 per cent to 69.60 pence per share.