Lloyds share price forecast after the latest customers’ lawsuit

The Lloyds (LON: LLOY) share price has been under pressure in the past few weeks as investors reflect on the company’s new strategy. The stock ended last week at 43p, which was substantially higher than the year-to-date high of more than 50p. 

Lloyds Bank legal challenge

Lloyds Bank is the biggest domestic bank in the UK. It has a total market capitalisation of more than £30 billion and more than 1,500 branches. The bank operates its eponymous brand together with Halifax, Bank of Scotland, Scottish Widows, and MBNA. It also has a money management joint venture with Schroders, one of the biggest asset managers in the UK.

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Lloyds Bank is changing. Recently, the bank announced its intention to become the biggest landlord in the UK. This is part of the bank’s approach to diversify its income away from interest. Recently, the bank also announced its acquisition of Embark, a retirement company with more than 40 billion pounds of assets under administration and 425k customers.

Lloyds Bank also announced two key management changes. Earlier this year, its then chairman left to become the chairman at Credit Suisse. And last month, Charli Nunn became the Chief Executive. He brings a wealth of experience in wealth management, meaning that he could transition the bank to that direction also. 

The Lloyds share price will be in the spotlight on Monday after the company got sued by a group of 150 homeowners. They allege that they have lost thousands of pounds after being sold mortgages tied to inflation. This suit targets Bank of Scotland. 

The suit alleges that these claims were unfair to individual customers according to the terms of the 1974 Consumer Credit Act. One customer says that she took a loan of £187,000 to buy a £750,000 home in 1998. The customer now owes the bank £1.6 million while the property value rose to £2.8 million. 

Lloyds share price forecast

The four-hour chart shows that the Lloyds share price has been in an overall bearish trend in the past few months. Along the way, the stock has formed a descending channel that is shown in black. It has also moved below the 25-day and 50-day exponential moving averages (EMA) while the MACD remains below the neutral level. Therefore, the shares will likely maintain the bearish trend as investors target the lower side of the channel at 40p.

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