Lloyds announces £3.3bn loss

Thursday, 04 August 2011 10:50

Lloyds has announced a loss of £3.3 billion for the first half of the year as a result of the cost of compensation for customers who were mis-sold payment protection insurance.

The bank - which is 41 per cent owned by the taxpayer - said in May it was putting aside £3.2 billion to cover these compensation payments, the largest amount by any UK bank.

Lloyds reported a pre-tax profit of £1 billion over the six months to the end of June, down from £1.6bn in the same period in 2010.

It went on to state that it is "on track" to meet its business lending targets set out by Project Merlin.

The bank is currently looking to sell off 632 branches as part of an agreement with EU regulators following the merger and £20bn bailout and it confirmed it had received "a number of credible initial approaches".

Chief executive Antonio Horta-Osorio said the figures reflected the difficult market conditions at present.

"Ongoing challenges of economic and regulatory uncertainty, the effects of which, including subdued loan demand, financial market volatility, and increasing regulatory capital and liquidity requirements, are reflected in these results," he said.

Mr Horta-Osorio recently announced 15,000 job cuts at Lloyds, bringing the total since the merger with HBOS [Halifax Bank of Scotland] in 2009 to 43,000.

Barclays has set aside £1 billion for payment protection insurance compensation claims, while Royal Bank of Scotland has earmarked £850 million and HSBC £269 million.

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