Current affairs

Insurance scandal causes Lloyds a loss of £3.5bn

Insurance scandal causes Lloyds a loss of £3.5bn

Lloyds bank today revealed a loss of £3.5bn for the year 2011, following the use of £3.2bn to cover payment protection insurance claims.

The result was worse than expected and the company is among the biggest fallers in the FTSE 100, down 2.4%. The taxpayer, which owns 41% of the share, was left with a loss of £10bn.

Chief executive Antonio Horta-Osorio, who took two months sick leave on the latter part of 2011, was relatively optimistic as he believed the results weren’t ‘profit warning’. However, he reiterated that the income would be lower in 2011.

He said: “Given the economic outlook, in 2012, on a combined business basis, we expect income to be lower than in 2011, given further non-core asset reductions, subdued demand in the core loan book, higher wholesale funding costs, and interest rates likely to remain at low levels for longer.”

If PPI charges were to be ignored, then Lloyds had a profit of £2.7bn in 2011, up 21% in the previous year.

Total income, net of insurance claims saw a drop from £24.96bn to £20.77bn , reflecting subdued lending demand, disposals of non-core assets and a lower lending margin.

The impairment losses from bad loans also saw a reduction to £9.79bn, a trend which is expected to continue in 2012.

Mr Horta-Osorio commented on the figures stating: ‘the quality of new business is better’.

Rajeeb Gurung

More in Current Affairs

Understanding Interpol notices and arrest warrants in the UAE

The editorial unit

The role of expert business plan writers in securing funding for startups

The editorial unit

What you need to know about full fibre broadband

The editorial unit

“Chill the VR Out”: YourHaven’s hilarious and heartfelt campaign for Mental Health Awareness Month

The editorial unit

Women of Ireland have rolled over for long enough: The 8th and the long walk to abortion rights

Emma Kiely

Changes to expect during menopause

The editorial unit

Why Equity Linked Savings Schemes is a preferred tax saving?

The editorial unit

How the world’s top designers would rebrand political parties

The editorial unit

Royal baby furore: Proof that the British monarchy is still popular?

Eoin O’Sullivan-Harris