Lloyds Banking Group posts £3.3bn loss
Lloyds Banking Group announces losses of £3.3bn after putting aside £3.2bn to compensate people who were mis-sold payment protection insurance.
Lloyds, which is 41 per cent state-owned, reported a £3.3bn pre-tax loss in the six months to June, compared to a £1.3bn profit last year.
Stripping out the provision set aside for customers mis-sold PPI, the bank saw underlying profits plunge 31 per cent to £1.1bn as it struggled with the “subdued” economic climate.
Lloyds chief executive Antonio Horta-Osorio unveiled his vision for the bank in June, which included 15,000 job losses as part of a cost-cutting programme.
The group, which owns Halifax, Bank of Scotland and Cheltenham & Gloucester, is being forced to sell branches in return for the £20bn in state aid it received following the 2008 credit crisis.
Earlier this week Barclays profits fell because it was forced to set aside £1bn to deal with the PPI scandal.
‘Credible approaches’
The UK’s biggest lender hopes these measures will push up the bank’s share price to a level at which the Government could start reducing its stake at a profit. But at 40p – a two-year low – the price is a long way off from the 63p at which the Government would break even.
Mr Horta-Osorio refused to confirm the number of organisations who have approached the bank over the sale process after reports suggested interest had been disappointing.
Read more: Lloyds tops list as complaints rise
He said: “We can confirm we have had a number of credible approaches and they have been in line with our expectations.”
He added: “We are confident we will find a buyer.”
Lloyds is understood to be in talks with six parties, of which only two – new bank venture NBNK and Co-Op Bank – have made formal expressions of interest.
Lloyds said it was on track to meet its full-year target for the Project Merlin agreement with the Government, after it extended £21.2bn of gross lending to businesses in the period, including £6.7bn for small businesses.
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