Lloyds, Europe’s second-biggest bank by market value, also set aside another 500 million pounds ($765 million) to compensate customers mis-sold loan insurance, bringing its total compensation bill to almost 14 billion pounds, more than double that of any other bank.
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The lower profits came despite costs linked to its simplification programme dipping nearly 72 per cent to £37 million and with no further provision booked for TSB, which had added £105 million in costs in Q3 of a year ago. That compares with the 2.1 billion-pound average estimate of six analysts surveyed by Bloomberg.
The bank reported third quarter statutory pretax profit, including one-off items, of £958m, up from £751m. The Treasury has recouped about 15.5 billion pounds by selling stock to institutional investors and through a yearlong trading program due to finish in December.
Stripping out loan losses, Lloyds’ underlying profits of £1.97 billion between July and September were also shy of hopes and below the £2.16 billion seen for the same quarter a year ago.
Over the last five years banks have already set aside more than 28 billion pounds ($42 billion) to meet compensation claims.
BARCLAYS – British bank Barclays Plc has appointed James “Jes” Staley as its new chief executive and said the former JPMorgan investment bank boss will be paid up to 8.24 million pounds ($12.6 million) a year. Banking net interest margin improved 17 basis points to 2.64 percent.
That dashed market expectations for about £2.3 billion.
Lloyds Banking Group has said its quarterly profits slipped even though the group managed to book lower charges and costs. The shares are down about two percent in the year-to-date. Lloyds said other income is expected to recover in the fourth quarter, but for full year, it is now expected to be slightly below 2014.
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The increase is a blow to the bank and Britain’s finance ministry, which is planning to sell at least 2 billion pounds worth of shares in Lloyds to private retail investors next spring to return the bank to full private ownership.
