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Lloyds takes bigger PPI hit but profits up – MoneyWeek

Lloyds takes bigger PPI hit but profits up – MoneyWeek

Thiswasdown9%comparedtothe£316mitmadeinthelastquarterof2011。

LloydssaidithadseenanincreaseinthevolumeofcomplaintsbeingreceivedfollowingthePPImis-sellingscandal。

PPIismeanttocoverloanrepaymentsifthepolicyholderfallsill,isinjured,orlosestheirjob。

However,someholderslaterfoundtheycouldnotclaimonthepolicy,somewerewronglytoldtheyhadtotakeitasaconditionofaloan,whileothersdidnotevenrealisetheyhadbeensoldit。

Lloydsissettingasideanadditionalprovisioninthefirstquarterof2012of£375mtocoverclaims。

Thegroupwasforcedtoearmark£3。

2bnformis-sellingPPIin2011,soitstotalhasnowreached£3。

575bn。

Inthepoliticallychargedareaofsmallbusinesslending,Lloydssaidithadincreasednetlendingtosmallcompaniesbyfourpercent,comparedtoacontractioninthemarketasawholeoffourpercent。

Thebanksaiditwasontargettodeliveronpromisestomake£12bnofgrossnewlendingtoSMEsthisyear。

Lloyds,whichwasbailedoutbythegovernmentin2009,saiditwasbecomingasaferbankintermsofitsbusinessmodel。

Itsaiditscoretieronecapitalratiohadincreasedto11%,up20basispointssince31December2011。

Ithasreduceditsrelianceoninternationalmoneymarketswithtotalwholesalefundingreducedto£231。

3bn,downeightpercentcomparedtotheendof2011and24%sincethesameperiodlastyear。

Ithasalsocutitsloantodepositratioto130%from135%attheendof2011。

Badloanswerealsoimprovingwithimpairmentchargesfallingbymorethanathirdto£1。

7bn,comparedtothefirstquarterof2011。

Lloydssaiditsfirstquarterfiguresmeantitwasconfidentofdeliveringonit2012financialguidance,despitethechallengingmacro-economicenvironment。

AlthoughourresultsreflectedthesubduedUKeconomicenvironment,theactionswehavetakentofurtherreducecosts,strengthenthebalancesheetandreducerisk,andtheadditionalinvestmentwehavemadeinourcorefranchise,aremitigatingtheseeffectsandwillpositionuswellforfuturegrowth,saidchiefexecutiveAntónioHorta-Osório。

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