Lloyds Takes Fresh PPI Charge as Net Profit Stays Flat

By Margot Patrick 

LONDON-- Lloyds Banking Group PLC on Wednesday took a fresh GBP500 million ($756 million) charge to cover payment protection insurance claims as it reported a flat third-quarter net profit.

The British bank said net profit was GBP690 million, down slightly from GBP693 million a year earlier. Underlying profit, which strips out certain costs and provisions and excludes the TSB unit it floated last year, was down 3% at GBP1.97 billion from GBP2.04 billion.

Chief Executive António Horta-Osório on Wednesday said the group has had a good year so far, with underlying profit rising 6% in the first nine months compared with the year earlier. He said the drop in underlying profit in the third quarter was the result of lower-than-expected revenue in the lender's commercial and insurance business.

The new provision to compensate customers who were wrongfully sold insurance on loans and credit cards was largely expected, and brings Lloyds's total bill over PPI to just under GBP14 billion.

The U.K. government owns just under 11% of the bank after a series of bailouts in the financial crisis. The stake, down from 43% at its peak, has been reduced steadily through share sales in the past two years.

More than 250,000 people have registered interest in buying Lloyds stock in a planned retail share sale next spring, Chancellor George Osborne said earlier this month.

Write to Margot Patrick at [e-mail]

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October 28, 2015 03:58 ET (07:58 GMT)

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