It added that its underlying profit hit £6.4 billion in the first nine months, a 6% improvement on 12 months ago.
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It said third quarter underlying pre-tax profit fell 8% to £2 billion compared with a year ago, with analysts expecting the bank to post a profit of around £2.3 billion.
Lloyds Banking Group has taken another £500m charge to compensate customers mis-sold loan insurance, taking its total bill to £13.9 billion, more than double any other United Kingdom bank.
Lloyds said the expected quarter-on-quarter reduction in Insurance, primarily relating to the bulk annuity transaction in the second quarter, has been accompanied by tougher trading conditions in Commercial Banking and lower income from run-off assets.
“The results themselves are poor, while there is also limited commentary on the dividend outlook”, said Citi analyst Andrew Coombs.
Lloyds was rescued by the United Kingdom government during the financial crisis, with a 20.5 billion pounds funding that gave the government a 43 percent stake in the company. It has since reduced its holding to under 11%, raising over £15 billion.
The new provision to compensate customers who were wrongfully sold insurance on loans and credit cards was largely expected, and brings Lloyds’s total bill over PPI to just under GBP14 billion.
Lloyds Chief Executive Officer Antonio Horta-Osorio, 51, has eliminated thousands of jobs to help resume dividend payments and bolster earnings, battered by nearly 14 billion pounds in provisions for wrongly sold payment protection insurance. We think that a shorter time bar will actually get people to act more quickly and get receipt of their money more quickly. “In terms of general awareness, two years is not required”, Culmer said.
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The sum means that Lloyds has set aside more than twice the amount than any other bank. Lloyds has said it will look to return surplus capital of above 13 percent to shareholders.
