LONDON, Oct 31 (Reuters) - Britain's biggest mortgage lender
Lloyds Banking Group posted weaker-than-expected third
quarter pre-tax profits on Thursday, after making a further 1.8
billion pound ($2.33 billion) provision for mis-sold loan
The bank posted pre-tax profits of 50 million pounds for the
three months to end-September, below forecasts of 163 million
pounds, according to a company-provided average of analyst
Lloyds' underlying profits of 1.82 billion pounds also fell
short of analyst expectations of 1.98 billion pounds, after a
rise in impairments to 371 million pounds, largely due to a
single-name corporate loan failure and lower used car prices.
Britain's most costly consumer banking scandal continued to
haunt Lloyds, with the fresh charge at the top of a 1.2-1.8
billion pound forecast range published by the bank last month.
The provision followed a surge of last-minute claims filed
ahead of an August deadline and prompted the bank to suspend an
eagerly-anticipated share buyback programme.
Payment protection insurance (PPI) policies were sold
alongside a personal loan or mortgage to cover repayments if
borrowers fell ill or lost jobs, but many were unsuitable.
The deluge of PPI claims had already dented third quarter
results for rivals RBS and Barclays, sending
the industry's final compensation bill above an estimated 50
Lloyds said it was cutting costs faster than expected and
reduced its total costs target for the year by 100 million
pounds to 7.9 billion pounds.
Loans and advances to customers increased by 6.2 billion to
447.2 billion in the third quarter with growth in the lender's
open mortgage book, small business lending and Motor Finance.
Net interest margin, a key measure of profitability,
remained in line with guidance at 2.88 percent.
The bank also announced a shake-up of its leadership team,
with Chairman Norman Blackwell retiring from the role at or
before the bank's 2021 annual meeting, while chief operating
officer Juan Colombus will step down in July.
($1 = 0.7739 pounds)
(Reporting by Iain Withers, editing by Sinead Cruise)