PPI charge hits Lloyds results
Lloyds Banking Group, Britain's biggest mortgage lender, posted a loss after setting aside an extra £1 billion (€1.24 billion) in the third quarter to compensate clients for mis-sold loan insurance.
The net loss narrowed to £1.05 billion in the first nine months from £2.82 billion a year earlier, the London-based bank said in a statement.
"We have made further significant progress this quarter, improving underlying performance in a challenging environment," chief executive Antonio Horta-Osorio said.
"Disappointingly, legacy issues continue to affect our results."
Lloyds had already earmarked £4.3 billion, more than any other bank, to compensate clients who were forced to buy, or did not know they had bought insurance to cover their repayments on mortgages, credit and other loans.
Barclays Plc, Britain's second-biggest bank, said two weeks ago it would take an additional £700 million PPI charge.
Lloyds has reduced its loan book, cut costs and reined in bad debts as part of a recovery plan and the rate of its progress has led to hopes it could restore dividends in 2014.
The bank said it is on track to cut costs to £10 billion this year, down £1 billion from 2010 and two years ahead of target. It said it expects to cut its non-core assets by about £38 billion this year, £13 billion more than it had planned at the start of the year.
Lloyds made an underlying profit of £840 million in the quarter, up from £419 million a year ago.