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Lloyds Irish unit shrinks its loan book

Friday, March 01 16:08:53

Irish loans at part-nationalised British bank, Lloyds, shrank from £24.8 billion to £19.5 billion last year, it said today.

The bank said its now defunct Bank of Scotland (Ireland) had new impaired Irish loans that eased from 4.1 per cent to 1.6 per cent in 2012.

Britain's biggest retail bank set aside another £1.5 billion to compensate customers mis-sold payment protection products, taking its bill for that to £6.8 billion. It set aside £400 million more for compensation on interest rate swaps.

It marked the fourth attempt by Lloyds to provision for expected PPI compensation and it has paid out far more than any other bank. PPI policies were meant to protect borrowers who found themselves out of work because of sickness or redundancy but were often sold to customers who did not want or need them.

Provisions dragged the bank to a pretax loss of £570 million for the year, compared with a loss of £3.5 billion in 2011.

It said underlying profit rose to £2.6 billion in 2012 from £638 million a year earlier.