Lloyds sets aside £115m as profits fall

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Lloyds Banking Group has set aside £115m for “retail conduct” issues as pre-tax profits for the first three months fell 46 per cent to £654m.

The bank has refused to disclose what the provision relates to, but has not set aside any extra money for missold payment protection insurance.

Lloyds partly attributes the fall in profits to a £790m hit for redeeming a batch of investor bonds.

A Lloyds spokesman says the bank also reined in its mortgage lending in the period due to the low base rate.

The bank also paid £161m in redundancy payouts, mainly as part of its “simplification programme” to improve business processes.

Lloyds group chief executive António Horta-Osório says: “In the first three months of this year we have continued to make good progress, delivering a robust financial performance and maintaining our strong balance sheet.

“These results demonstrate the strength of our differentiated, simple, low risk business model and reflect our ability to actively respond to the challenging operating environment.”