Broker tips: Barclays, Lloyds, Rio Tinto, Glencore, BHP Billiton

The FCA´s move on Friday to draw a line under the Payment Protection Insurance scandal is positive overall for the industry, with Lloyds likely to be the most favourably impacted, followed by Barclays, according to JP Morgan.

Furthermore, analysts Raul Sinha and Vivek Gautam highlight the market regulator´s indications that the rules and guidance arising from the Supreme Court´s decision on the Plevin case will only apply in cases where the payments within the credit agreement are on or after 6 April.

That means the impact of the decision, in the case of Lloyds , for example, will be small – approximately 1.2bn pounds - in the context of the issue (13bn pounds).

Sinha and Gautam maintained their overweight stance in the wake of the announcement.

The UK government confirmed it would continue to forge ahead with the re-privatisation of Lloyds via a retail sale of at least 2bn pounds in spring 2016, news which should please investors, Investec said.

That amount is slightly less than expected. Nonetheless, the government has already reduced its stake in Lloyd´s from 43% in 2009 to 12% at present so its plans appear “well on track”.

Indeed, the manner in which the “drip” of the disposal is proceeding shows the state is intent on moving ahead quickly.

As an inducement, the government will offer a 5% discount to the market price and a 1-for-10 bonus share for 12-month retention.

One small advantage of those perks is that it is attracting “new money” to the re-privatisation of the lender, Investec analyst Ian Gordon pointed out.

Finally, the FCA´s consultation on the possibility of a time-bar for final submission of PPI-related complaints should be cautiously welcomed, Gordon added.

The analyst reaffirmed his 'buy' recommendation and 86p target price on the lender´s shares.

Societe Generale reviewed its ratings on Rio Tinto, Glencore and BHP Billiton as it took a look at the metals and mining sector, which it rates at ‘neutral’.

The bank lifted Rio Tinto to ‘buy’ from ‘hold’, albeit with a lower price target of 2,450p from 3,100p. It said the shares combined cash flow and balance-sheet resilience with an attractive valuation in both a spot and SocGen base-case scenario.

SocGen said iron ore has proven more resilient than it expected, with prices solidly anchored at $55 a tonne against market expectations of a crash below $50.

It upgraded Glencore to ‘buy’ from ‘hold’, saying fears of bankruptcy are overblown and the stock is undervalued. It cut the price target to 130p from 175p.

Finally, SocGen downgraded BHP Billiton to ‘hold’ versus ‘buy’ as it trades on demanding 2016 multiples and could see its balance-sheet strength tested if management sticks to its current dividend policy. The bank slashed its price target on the stock to 1,050p from 1,600p.