LONDON – Lloyds Banking Group on Wednesday revealed that first-half profits surged 40 percent, buoyed by a sharp drop in claims for mis-sold credit insurance.
Net profits totalled £2.2 billion ($2.9 billion, 2.5 billion euros) in the first six months of 2018 compared with £1.6 billion in the same portion of 2017, LBG said in a results statement.
Underlying pre-tax profit grew seven percent to £4.2 billion.
The institution set aside yet more money to compensate customers mis-sold a controversial insurance product.
Lloyds alotted £550 million to compensate for payment protection insurance, but this was roughly half the provision made a year earlier.
The bank’s total PPI compensation bill now stands at a staggering £19.2 billion.
That is far higher than other UK banks involved in the long-running scandal. It also took a £377-million hit in restructuring costs as it pushes ahead with a three-year overhaul that will see it focus on digital banking.
Chief executive Antonio Horta-Osorio described the results as “another strong and sustainable financial performance”.
However, he also flagged uncertainty on the horizon in the form of Brexit, which is due in March 2019. “The UK faces a period of political and economic uncertainty in the run-up to the UK’s departure from the European Union,” Horta-Osorio said. “However the UK economy remains resilient and, excluding the impact of adverse weather, continues to demonstrate robust growth.
“The economy is benefiting from the highest employment rate in half a century and household indebtedness remains significantly below pre-crisis levels, with strong growth in the world economy also positive for UK exports.” (AFP)
