Broker snap: Lloyds faces another fine, Investec keeps 'hold'

Investec says that the news of another regulatory fine at Lloyds should only have a little impact, seeing as though the banking group still has a lot of mis-selling issues hanging over its head.Media reports have said that Lloyds faces another referral to the FSA's Enforcement team. The news "may trigger little more than a shrug of resignation. For investors, we sense that this is the correct reaction to this particular event," said analyst Ian Gordon.He said: "The cost of redress for Lloyds's market-leading role in the mis-selling of financial products over the past two decades - e.g. pensions, endowment mortgages and PPI to mention just a few - will dwarf any fresh regulatory fine, alongside the gaping hole left in the Other Income line by lost PPI revenues that it is unable to fill."Lloyds has already taken £4.3bn in provisions for PPI (payment protection insurance) redress. The broker said that the PPI product alone contributed around 14% of the company's pre-crisis profits."We are expecting further provisions for redress to be taken in H2 2012e to include interest-rate swap mis-selling for which Lloyds is reportedly hiring 80 highly paid 'claims handlers' - company guidance 'not material' - as well as a top-up for Clerical Medical mis-selling in Germany."The broker has maintained its 'hold' rating and 36p target price for the stock.BC