Economy

Lloyds posts 38% rise in nine month profits

Lloyds posts 38% rise in nine month profits”

Lloyds Bank has announced pre-tax profits for the third quarter of £1.95bn, a rise of 141% on the same period a year ago.

Underlying profit for the period nudged up from £1.9 billion to £2 billion and Lloyds raised its financial targets for 2017.

"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", Lloyds' chief executive António Horta-Osório commented in the statement, adding that asset quality remained strong strong, reflecting the group's "prudent approach to risk, while the UK economy remains resilient". That beat analysts expectations, which had predicted profits of around £1.6bn for the quarter.

Lloyds did not add to its industry-leading bill to account for the payment protection insurance (PPI) scandal, having taken a £1bn hit in its third quarter a year ago.

He said the United Kingdom economy remained "resilient" despite pressure on the banking sector to hold more cash in reserve and be more careful on lending.

The company said the credit card business showed a decline in the level of "persistent debt", and said consumers are being conservative in their borrowing.

Shares were broadly flat in morning trading at 67.2p.

It is the first full set of quarterly results since the Government offloaded the last of its stake in the bank - the remnants of a £20.3bn bailout at the height of the financial crisis - in May.

However, Lloyds took no additional charges in the quarter.

"All the dials are pointing in the right direction at Lloyds, but the share price is still being held back by a consensus of angst over Brexit", Laith Khalaf, senior analyst at Hargreaves Lansdown, said. In March the Financial Conduct Authority announced people seeking compensation for being wrongly sold the product will have to make their claims before 29 August 2019, finally drawing a line under one of the banking industry's biggest scandals.

Net interest income rose from £2.8 billion to £3.2 billion year-on-year with total income up 8% to £4.6 billion.

The group's trading update comes as the bank and former bosses face accusations in court from shareholders that they were "mugged" during the takeover of Halifax Bank of Scotland in 2008.

Lloyds is vigorously denying these claims, but the case is likely to see former bosses give evidence.

Among the claimants is TV star Noel Edmonds.



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