Lloyds Banking Group has announced its third quarter results and profit before tax for the period has risen £958 million – that's compared to £751 million during the same period last year.
The company also noted that underlying profit dropped to £1.97 billion compared to £2.16 billion last year. It said that tougher trading conditions in commercial banking had led to the decrease.
Net interest margin – the difference between money paid out to depositors and creditors and interest taken from loans – is a key measure in profitability for the company. It rose to 2.64 per cent during the period from 2.47 per cent. Lloyds said it believed the margin would remain around 2.63 per cent fro the rest of the year – that's up slightly from the 2.6 per cent the company had previously predicted.
The banking group also said that revenues were down four per cent.
'Not immune to the global slowdown'
Commenting on the results, banking analyst Chirantan Barua said: "We see the data as a reinforcement of weaker macro and corporate appetite going into the year end and next year."
He also said the data should be seen as a reminder that the UK is not immune to the global slowdown.
In early trading on Wednesday morning (October 28th), shares in Lloyds dipped five per cent.
Lloyds said it has set aside another £500 million for compensation to customers over mis-sold payment protection insurance (PPI) – that's down from the £900 million the firm set aside in 2014.
The Financial Conduct Authority has recently said it plans to set a 2018 deadline for people to claim compensation for mis-sold PPI. This news was seen as a boost for Lloyds. The firm has set aside more than any other bank – at least £13.5 billion – to compensate customers for the insurance, which was sold to people who did not want, need or understand it.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.