Lloyds 3Q Pretax Profit Hit by PPI Costs

Date : 10/31/2019 @ 8:09AM
Source : Dow Jones News
Stock : Lloyds Banking Group Plc (LYG)
Quote : 1.51  0.06 (4.14%) @ 12:43AM
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Lloyds 3Q Pretax Profit Hit by PPI Costs

Lloyds Banking (LSE:LLOY)
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By Sabela Ojea


Lloyds Banking Group PLC (LLOY.LN) on Thursday reported a significant fall in pretax profit for the third-quarter after booking larger PPI costs following a late surge in claims ahead of the Aug. 29 deadline.

The U.K.'s largest retail bank booked a 1.80 billion pound ($2.32 billion) provision for the expected payment-protection insurance expenses. It said last month that the bank expected to book GBP1.2 billion to GBP1.8 billion PPI costs in the quarter and suspended a buyback program to preserve capital.

The London-listed bank made a pretax profit of GBP50 million for the three months ended Sept. 30 compared with GBP1.82 billion for the same period a year earlier.

Underlying profit, which excludes exceptional and other one-off items--came to GBP1.82 billion, down 12% from the year-earlier quarter.

Loss after tax came to GBP238 million from a profit of GBP1.42 billion for the same period of time in 2018.

Lloyd's net interest income fell to GBP3.13 billion compared with GBP3.20 billion, and had a net interest margin of 2.88%, from 2.93% in the same quarter a year earlier.

At Sept. 30, Lloyd's pro-forma Common Equity Tier 1 ratio--a key measure of balance-sheet strength--was 14.4% after dividend accrual, down from 14.6% as at June 30.

"I am disappointed that our statutory result was significantly impacted by the additional PPI charge in the third quarter...We will maintain our prudent approach to growth and risk whilst continuing to focus on reducing costs and investing in the business," Chief Executive Officer Antonio Horta-Osorio said.


Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix


(END) Dow Jones Newswires

October 31, 2019 03:54 ET (07:54 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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