Lloyds’ quarterly net loss grows to €1.3bn

Lloyds Banking Group, Britain’s biggest mortgage lender, posted a wider third-quarter loss after setting aside an additional £750m (€875m) to compensate clients wrongly sold loan insurance.

Lloyds’ quarterly net loss grows to €1.3bn

The net loss was about £1.3bn in the three months to the end of September from £390m in the year- earlier period, the London-based bank said in a statement. It reported £626m of losses on asset sales.

Lloyds’s recovery, which saw the British government sell £3.2bn of shares in the lender at a profit last month, has been blighted by past regulatory mistakes.

The provision brings the total it has earmarked to redress customers sold payment protection insurance that didn’t cover them or they didn’t need to about £8.1bn, the most among the UK’s banks.

Some of the “reported numbers for Lloyds are pretty awful,” Ian Gordon, an analyst at Investec in London with a hold rating on the stock, said.

“An otherwise positive set of results were offset by one-off items that were a lot larger than had been anticipated.”

Pretax profit before one-time items climbed to £1.52bn from £831m in the year-earlier period, Lloyds said. That beat the £1.46bn median estimate of eight analysts surveyed by Bloomberg. Impairments for souring loans fell 47% to £670m.

The stock fell 2.1% to 77.95 pence in London trading, above the 61 pence the government says it will break even after providing a £20bn rescue almost five years ago. Lloyds has gained about 62% this year, the best-performing stock among its UK peers.

The bank, which is 33% government owned, has started discussions with the UK regulator about resuming dividend payments and will provide an update on timing at the year-end results, chief executive Antonio Horta-Osorio said. Lloyds last paid a cash dividend in 2008, before its takeover of HBOS led to its bailout by the government.

- Bloomberg

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