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Lloyds Banking Group’s (LSE:LLOY) Chief Executive Officer, Antonio Horta – Osorio must have been inspired by the Halloween when he made his review for the bank’s July to September financial health and the nine months since January when he, unfortunately, disclosed “legacy issues” continue to affect the bank’s profit-making business.
A further one billion pounds set aside for the Payment Protect Insurance (PPI) claims was deducted from the bank’s third quarter profits for the year, putting the aggregate PPI provisions for the year to date at £2.075 billion and wiping out what otherwise was a great three months of banking activities.
“Disappointingly, legacy issues continue to affect our results,” the Chief Executive Review revealed, illustrating how PPI provisions swept out most of the group’s underlying and management profit and left it with pre-tax loss of £144 million for the quarter.
Better Bank
Despite that, Mr. Horta – Osorio claimed the bank is better than how it was a year ago, saying that underlying performance improved even in a “a challenging environment” and “continued to deliver returns… and strengthen our already robust balance sheet.”
In an underlying basis, a company’s way of assessing performance in a more stable manner, Lloyds delivered a 148% surge in profit to £1.904 billion in the past nine months, £840 million of which was gained for the third quarter alone – twice as much as what the bank earned during the comparative period.
And that was made after disposing about £110 billion for the year to date, £31 billion made in the previous quarter, a drop of 14% in income, and a lower net interest margin.
The Chief Executive also highlighted that Lloyds was at the forefront of helping the UK economy prosper, saying it has extended credit to one in four first – home buyers and is targeting £13 billion worth of loans to be granted to small and medium-scale enterprises by the end of 2012, courtesy of the Funding for Lending scheme of the UK Government.
“We remain confident that, by delivering our strategy to be a simple, customer-focused UK retail and commercial bank, we can rebuild the trust of our customers and other stakeholders and can deliver sustainable returns for our shareholders over time,” Mr. Horta – Osorio stated.
The investors seemed to agree as shares of Lloyds were now up 6.5% to 43.25 pence by 11:19 AM GMT with over 171 million shares traded since London opened today.
