The payment protection insurance albatross is still hanging round the neck of Lloyds Banking Group PLC (LON:LLOY), the bank revealed in its third quarter results.
Shares fell 3.2% to 53.56p in the first half hour of trading as the bank, in which the tax-payer still owns a sizeable stake (9%), set aside another billion quid to cover potential pay-outs relating to the payment protection insurance (PPI) mis-selling scandal.
The PPI provision reduced reported profit before tax to £811mln in the third quarter from £958mln in the same period of last year. Underlying profit, which excludes the PPI provision and other one-off items, eased to £1.91bn from £1.97bn the year before.
Net interest income held steady at £2.85bn versus £2.86bn the previous year.
The bank reaffirmed guidance for the full year.
“The outlook for the UK economy remains uncertain; however, the strength of the recovery in recent years means the UK is well positioned,” claimed António Horta-Osório, the group’s chief executive officer.
“The group's transformation and successful execution of strategy, along with its competitive advantages in costs and risk, also position us well for the future and to achieve our goal of becoming the best bank for customers and shareholders.
UBS was first to the party with its take on Lloyds third-quarter figures, which failed to set the City alight.
The Swiss bank’s take on its UK peer was that earnings came in slightly ahead of forecast, while the balance sheet proved resilient.
The shares marked time at 55p after Lloyds revealed it would set aside a further £1bn to cover liabilities related to the payment protection mis-selling scandal.
UBS reckons the stock is worth 65p.
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