Lloyds Banking Group’s half-year profits have been hit by further fines for its misconduct, including another £600 million provision for the mis-selling of payment protection insurance (PPI).
The bank’s newly posted results show an underlying profit rise of 32% from the same period last year, up to £3.8 billion.
However, actual pre-tax profit fell by more than 50% to £863 million, after the bank was forced to set aside £1.1 billion for “legacy issues“.
This sum also includes the £218 million fine levied on the bank for manipulating the Libor rate, issued by the Financial Conduct Authority (FCA) and US regulators on Monday.
Antonio Horta-Osorio, chief executive of Lloyds Banking Group, insisted that the jump in underlying profits prove that Lloyds has “continued to successfully execute our strategy”.
He added, “We substantially improved our underlying financial performance and delivered a statutory profit, despite further charges for legacy issues.”
The bank remains 25% owned by the taxpayer, after the government sold more than £7 billion of its shares in the past year.
Now, Lloyds says it will ask for permission to restart “modest” dividend payments to shareholders, which have been blocked since the government bail out.
These latest legacy payments mean that banks have now shelled out around £23 billion in fines relating to PPI. Lloyds alone has paid £10 billion.
The investigation into the Libor scandal also continues, as the Serious Fraud Office decides whether criminal charges should be brought against the bankers involved. By rigging fees payable to the Bank of England under the taxpayer-supported Special Liquidity Scheme, the group attempted to reduce its payments.
This comes as new, tougher measures have been put forward to regulate the industry. These include a mechanism that would allow for the clawing back of bankers bonuses seven years after they have been paid.
Photo: Elliott Brown via Flickr
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