Thursday, November 01 08:19:28
Lloyds Banking Group took another 1 billion pound ($1.6 billion) hit to compensate UK customers mis-sold loan insurance, taking its charge for the scandal to 5.3 billion pounds and dragging it to a third-quarter loss. Britain's biggest retail bank today reported a pretax loss of 144 million pounds for the three months to the end of September, compared with a loss of 607 million a year earlier. It said bad debts this year are expected to fall to about 6 billion pounds, about 1.2 billion less than it had expected at the start of the year. Bad debt losses in the third quarter fell 35 percent from a year ago to 1.26 billion pounds.
Lloyds had already set aside 4.3 billion pounds to repay customers wrongly sold payment protection insurance (PPI), far higher than rivals as it had the biggest share of the PPI market, and analysts had estimated it could set aside as much as 2.3 billion more. It said it had paid out or spent 3.7 billion pounds on the issue by the end of September, or 70 percent of its provision. The PPI losses threaten to overshadow CEO Antonio Horta-Osorio's success in turning around the bank following a bailout in 2008 which left it 40 percent state-owned.
Lloyds has reduced its loan book, cut costs and reined in bad debts as part of a recovery plan and the rate of its progress has led to hopes it could restore dividends in 2014. The bank said it is on track to cut costs to 10 billion pounds this year, down 1 billion from 2010 and two years ahead of target. It said it expects to cut its non-core assets by about 38 billion pounds this year, 13 billion more than it had planned at the start of the year. Lloyds made an underlying profit of 840 million pounds in the quarter, up from 419 million a year ago. ( C) Reuters