Monday, 6 December 2021

Lloyds Bank profits fall after fresh $669 mn PPI charge

LONDON: Britain’s biggest mortgage lender Lloyds Banking Group posted weaker-than-expected pretax profits, as a further 550 million pound ($668.9 million) provision to meet claims for mis-sold insurance to consumers weighed on earnings.

The bank posted pretax profits of 2.9 billion pounds for the first half of the year, below forecasts of 3.45 billion pounds according to a company-provided average of analyst forecasts.

The figure was down 7% from 3.12 billion pounds for the same period the previous year.

Lloyds said exceptional charges, including PPI, would knock its ability to build capital for 2019 to the lower end of its 170 to 200 basis points range.

Without one-off costs, Lloyds matched analyst forecasts for underlying profits, at 4.2 billion pounds.

Chief Executive Antonio Horta-Osorio said Britain’s deepening Brexit crisis had impacted on business confidence.

Britain’s lenders are bracing themselves for a potentially chaotic Brexit, with businesses voicing concerns at new Prime Minister Boris Johnson’s combative approach and the raised prospects of the country leaving the European Union without a deal, which has slashed the value of the pound.

Lloyds is seen as particularly exposed to any downturn through its billions of pounds of lending to British consumers and businesses, but unlike rivals Royal Bank of Scotland , Barclays and HSBC is yet to make a provision against a potential spike in bad loans.

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