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Lloyds hits 10-year profit high as new era beckons

Wednesday, February 22, 2017 - 01:43

Lloyds Banking Group has reported its highest full-year profit in a decade, as the taxpayer-backed bank nears a complete recovery from its crisis-era past. David Pollard reports.

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It's been a long way down for Europe's banks - but for Lloyds at least the way does appear to be back up again. The UK lender signalling a complete recovery from the financial crisis with its highest full-year profits in a decade. It's boosted the UK government's hopes to return it to full private ownership within the next few months. And the bank's share price and dividend: the first up nearly four per cent on the results, the second up 11 per cent on the year. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "The course that the bank is on is very positive .... There's been a big turnaround job at the bank over the last few years and it's clearly now starting to pay off with this significant improvement in profits in 2016." Pretax profit for the year was 4.2 billion pounds - more than double 2015 ... Driven by lower set-asides to compensate customers for mis-sold loan insurance. On top of 17 billion pounds already, it's reserving another one billion for that, but hopes it'll the last such provision. A bigger issue, say analysts, could be its home market. Lloyds reporting a 14 per cent increase in bad loans charges - in a possible telltale customers are struggling with Brexit uncertainty. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "It has to be a concern for Lloyds and if the UK economy does take a turn for the worse, if the consumer does respond badly to these high levels of inflation, then the bank is going to face further difficulties again." But when Europe says auf wiedershen to Britain, it could still beckon to Lloyds. The bank confirming reports it's close to selecting Berlin as a European base - to secure EU market access post-Brexit.

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Lloyds hits 10-year profit high as new era beckons

Wednesday, February 22, 2017 - 01:43