Lloyds Bank profits surge in 'resilient' UK economy

As payment protection insurance (PPI) costs recede

Britain’s largest mortgage lender Lloyds Bank has announced pre-tax profits for the third quarter of £1.95bn, a rise of 141 per cent on the same period last year.

Lloyds boss António Horta-Osório said the economy “remains resilient” and the results showed the strength of the bank’s low-risk business model.

“In the first nine months of the year we have delivered strong financial performance with increased underlying and statutory profit, a significant improvement in returns and strong capital generation,” Horta-Osório said.

“These results highlight the strength of our customer-focused, simple and low-risk business model and the benefits of our competitive advantage in the UK.”

“Asset quality remains strong, reflecting our prudent approach to risk, while the UK economy remains resilient,” he added.

Llast year’s bank result included a big provision to cover claims for mis-sold payment protection insurance (PPI).

According to Financial Times, the profit was buoyed by the lack of a PPI bill, after Lloyds was forced to earmark £1bn in the same period of last year. In the first half of this year, the bank had set aside £1.1bn as the number of claims increased after the compensation deadline was set as August 2019.

Should PPI rise above anticipated levels, it could pose a problem, but “we will be managing within the group’s resources and financial strength which we see today,” chief financial officer George Culmer told media.