Add thelocalreport.in As A Trusted Source
lloyds The banking group reported a 36% fall in third-quarter earnings as it felt the impact of an £800 million charge to compensate customers for car loans that were mis-sold to them.
The bank recorded a pre-tax profit of £1.2 billion between July and September.
This was more than a third less than the £1.8 billion profit in the same period the previous year, although it was more than the £1 billion profit most analysts were expecting.
The group’s latest results take into account setting aside more funds to cover potential costs related to the UK regulator’s motor finance compensation scheme.
It took an additional charge of £800 million in the third quarter, bringing its total compensation bill to an estimated £1.95 billion.
financial conduct authority (FCA) published proposals for a redress scheme after finding that almost 14 million are outstanding in payments on unfair car finance deals.
It calculated that each payment could average around £700 per deal.
William Chalmers, head of finance at Lloyds, said the bank is “concerned” about the watchdog’s proposed plan, which it believes is “disproportionate” to the actual level of harm being caused to consumers.
“We think the proposals, as they stand now, risk creating an anomalous outcome for customers, which is not a sensible place to start,” he said.
Mr Chalmers said the bank was looking forward to “constructive conversations” with the FCA and declined to say whether it might proceed with a potential legal challenge.
Lloyds said its debt, including mortgages, credit cards and motor finance, is set to rise over 2025 – with debt rising by 4% in the first nine months of the year.
Current account and savings account balances also increased this year as its customers spent less and saved more.
Mr Chalmers said the trend reflected salary increases increasing his clients’ balances, as well as “perhaps a slightly lower spending pattern than before”.
Chief executive Charlie Nunn said: “The group continues to perform well, demonstrating strategic progress as well as strong financial performance, including our recent acquisitions.” schroders Personal property.”
Mr Nunn said the bank benefited from income growth and cost savings “despite the impact of additional motor finance charges in the third quarter”.