25th February 2016
Lloyds Banking Group has reported that statutory profits before tax fell to £1.6bn during 2015, down from £1.8bn in the previous year.
In its full-year results, announced on Thursday the bank said it had set aside £4bn to cover payment protection insurance customer redress.
In all, the bank has now set aside a massive £16bn in PPI provisions.
Underlying profit at the bank, which was rescued by the British taxpayer at the height of the financial crisis, came in at £8.1bn, marking a 5% rise.
Traders welcomed the latest set of results from the bank, as its shares had jumped by 9%, or 5.78p, to 67.98p by 08:40am.
Commenting on its latest market update, group chief executive António Horta-Osório said: “We made a strong start in 2015 to the next phase of our strategy and have delivered a robust financial performance, enabling increased dividend payments.
“Our differentiated, UK focused, retail and commercial business model continues to deliver, with our financial strength, cost leadership and lower risk focus positioning us well in the face of current market uncertainty.
“We remain confident in our ability to become the best bank for customers and shareholders, while continuing to support the economy and helping Britain prosper.”
Following a six-year gap, Lloyds finally started to pay shareholders a dividend in 2015. In its results it said it would pay an ordinary dividend of 0.25p per share as well as a special payment of 0.5p, in a total payout worth some £2m.
The UK government’s stake in the bank now stands at approximately 9%.
In January George Osborne said he was postponing the upcoming Lloyds share sale to the public in the wake of the recent market volatility. It had been expected to happen sometime in the spring.
Laith Khalaf, senior analyst at Hargreaves Lansdown said: “Lloyds is the simplest of the UK banks as its activities are purely focussed on UK retail and business lending, with no roulette wheels spinning in the background. It’s easy to see why the public sale was so popular, before it got kicked into the long grass by the Chancellor.
“The public sale of Lloyds is still on ice, and while the share price shot up this morning, it’s still around 10% shy of where it needs to be for the government to break even on the bailout.
“It now seems unlikely the deal will resurface again before the Brexit vote, given the market volatility we could see as we approach the referendum date.”