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.
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