Profits slump 26 per cent at Lloyds Bank due to £2billion cost of PPI claims
By James Young | 20th February 2020
Banking giant Lloyds have blamed a 26 per cent drop in an otherwise "solid" year on an increase in PPI claims.
Pre-tax profits at Lloyds - who have one of their UK main offices at Barnwood - fell to £4.4billion, due to a charge of on PPI claims that reached in excess of £2billion.
The bank said that the PPI provision charge of £2.450billion was due to a "significant increase" in requests ahead of the claim submission deadline in August 2019.
Chief executive Antonio Horta-Osorio said that the results were "solid" aside from the PPI claims which have cost the bank a total of £21.9billion since the mis-selling saga first came to light.
"In 2019 the Group has continued to make significant strategic progress while delivering solid financial results in a challenging external market," he said.
"The Group's statutory performance was impacted by a substantial PPI charge related to the deadline for claims submission.
"Underlying performance was resilient, reflecting the health of our customer franchise and the strength of the business model.
"The Group's purpose is to Help Britain Prosper, underpinned by being the bank with the largest retail and commercial presence throughout the UK.
"In 2019 we helped around 23 per cent of first-time buyers by lending £13.8 billion while also achieving our target of lending £18 billion to businesses across the UK.
"We have also targeted reducing the emissions we finance by more than 50 per cent by 2030, in line with the UK's Net Zero Goal and the Paris Agreement.
"Given our clear UK focus, our performance is inextricably linked to the health of the UK economy.
"Throughout 2019, UK economic performance has remained resilient in the face of significant political and economic uncertainty, supported by record employment, low interest rates and rising real wages.
"Although uncertainty remains given the ongoing negotiation of international trade agreements, there is now a clearer sense of direction and some signs of an improving outlook.
"We remain well placed to Help Britain Prosper, support our customers and deliver strong and sustainable returns for shareholders."
Total net income for the year was £17.142billion, down four per cent on last year, while underlying profit was down seven per cent to £7.531 billion.
The annual report also showed that CEO Antonio Horta-Osorio took a pay cut largely in line with the drop in profits.
The Portuguese boss earned £4.7million in 2019, down from the £6.5million package he received in 2019.
Copyright 2020 Moose Partnership Ltd. All rights reserved. Reproduction of any content is strictly forbidden without prior permission.