Lloyds Banking Group has reported a 141 per cent increase in profit to £1.95bn for the third quarter of the year, with the bottom line boost coming from the bank making no further provision to compensate investors who it mis-sold payment protection insurance (PPI).
In the corresponding quarter last year, a substantial PPI provision was made, as it was in the second quarter of 2017.
Lloyds was one of the biggest mis-sellers of PPI. 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.
Stripping out the impact of the one-off items, profits were up 9 per cent.
The company reported both earnings growth, driven by a higher net interest margin, and a fall in its cost income ratio, meaning the growth that was achieved without a corresponding increase in costs.
Lloyds said the outlook for the housing market remains “stable”, with no signs of increased default rates on mortgages, and the company grew its mortgage book in the period under discussion in these accounts.
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.
Lloyds said it will pursue a “progressive” dividend policy this year, and hinted that it may generate sufficient surplus capital by year end to either pay a special dividend or pursue share buybacks.