Lloyds Banking profit jumps to 5.3 billion pounds but misses estimates
(23 February 2018 – United Kingdom) Lloyds Banking Group posted its highest pre-tax profit in 12 years, simultaneously announcing a share buy-back of up to £1 billion and £3 billion of strategic investment over the next three years.
The 24 percent rise in profit to £5.3 billion surpassed last year’s £4.2 billion, however was short of analysts’ expectations of £5.73 billion.
In a presentation to media, the bank’s Chief Executive Antonio Horta-Osorio said, “Our management team’s discipline and rigorous execution has enabled us to deliver superior profits and returns, ahead of our peers.”
The results announcement revealed that Lloyds had taken a charge of £600 million to compensate customers mis-sold payment protection insurance (PPI) as part of Britain’s costliest financial scandal.
The charge took the bank’s total PPI costs for 2017 to £1.65 billion.
Lloyds said the planned £3 billion in strategic investment will be spent mostly on staff and ensuring the bank is ready to adapt to the digital age.
This responds to new regulation forcing big banks to open up their customer data to rival lenders and financial technology firms with far lower cost bases, enabling them to compete more effectively for customers.
According to the bank, it will digitise 70 percent of its processes by 2020, enabling it to lower its cost income ratio to the low 40s from 46.8 percent in 2017.
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