British banking giant Lloyds has seen its profits surge by 99 per cent, despite being forced to set aside hundreds of millions in pounds for redress.
The bank’s profit before tax hit £1.3bn in the first three months of the year, a sharp increase from the £652m profit posted during the same period in 2016.
However, Lloyds was slapped with an additional £350m for payment protection insurance (PPI) provision after the Financial Conduct Authority revised its deadline for claims last month, extending the time bar to the end of August 2019.
The bank was also forced to set aside £100m to compensate victims of the HBOS scandal.
These results demonstrate our ability to respond to a challenging operating environment. António Horta-OsórioAntónio Horta-Osório, Lloyds chief executive, said the bank is determined to ensure the victims of HBOS are “fairly, swiftly and appropriately” compensated.
The bank looks set to be fully privatised this summer, weeks after the government broke even on the £20.3bn it paid to rescue the bank at the height of the financial crisis.
Underlying profit nudged up slightly to reach £2.1bn during the quarter, with the bank posting a fall in operating costs.
Earlier this month the bank revealed plans to shrink hundreds of branches.
Mr Horta-Osório said: “In the first three months of this year we have delivered strong financial performance with increased underlying profit, a significant improvement in statutory profit and returns.”
He said the results demonstrated Lloyds’ “simple and low-risk” business model and its ability to respond to what he described as a “challenging operating environment”.
The Lloyds boss also said the bank continues to make good progress in becoming simpler and more efficient, while delivering sustainable growth.
katherine.denham@ft.com
