Lloyds Banking Group’s profits plummeted almost two-thirds in the first half of 2014 as the bank took further hits for its role in the Libor and PPI misselling scandals.
The group has today reported a pre-tax profit of £863m for the first half of 2014, down 58 per cent from £2.1bn last year.
Lloyds says the fall in profits was driven by “legacy charges”, including a further £600m to settle claims of payment protection insurance misselling, taking Lloyds’ total PPI redress provision past £10bn.
The legacy charges also include fines of £226m levied by US and UK regulators this week relating to the bank’s role manipulating market benchmarks.
The group’s insurance division, which includes pension provider Scottish Widows, saw profits slump 18 per cent from £559m in the first half of 2013 to £461m this year. This was primarily due to a £100m hit from the Government’s auto-enrolment charge cap on the firm’s existing corporate pensions book.
Lloyds saw a 44 per cent increase in gross mortgage lending in H1 2014, from £13.8bn in 2013 to £19.8bn between January and June this year, including £892m through the Help to Buy mortgage guarantee scheme.
The UK Treasury reduced its shareholding in LBG from 32.7 per cent as at 31 December 2013 to 24.9 per cent as at 30 June 2014.
Lloyds Banking Group chief executive Antonio Horta-Osario says: “Addressing historic conduct issues continued to be a key theme in UK retail banks.
“The behaviours and actions identified by the investigations into these matters, including into submissions and communications between 2006 and 2009, were absolutely unacceptable.”