Lloyds Banking Group has booked a decrease of 20 percent in the annual profit before taxes for 2024, whereby city forecasts are missing in the midst of rising costs and one-off costs related to the current Motor Finance Commission scandal.
The FTSE 100 lender recorded a win of £ 5.97 billion last year, compared to £ 7.5 billion in 2023 and under the analyst expectations of £ 6.4 billion.
The income of Lloyds was dented by a lower net interest rate – essentially the difference between interest income from loans and the costs of financing – in an environment of falling rates. The bank has also taken heavier remediation and value reductions, including an extra £ 700 million linked to disputes around unknown or “partially known” committees in car lenses.
This newest set aside brings the total determination of the lender for possible compensation of the motorcycle financing to £ 1.15 billion, although Lloyds warned there, “considerable uncertainty” remains about the final result. The indictment is connected to a judgment of the Court of Appeal in which three consumers involved his key, Johnson and Hopcraft-Die challenged the liability of lenders when credit brokers such as car dealers arrange a lease-purchase agreement but do not fully make the committee data.
Charlie Nunn, Chief Executive of Lloyds, noted that the £ 700 million provision was prompted by the ruling of the Professional Court, which “goes beyond the scope of the original FCA Motor Finance Commissions Review”.
Despite this headwind, Lloyds reported that loans and advances to customers last year increased by £ 10.2 billion to £ 459.9 billion, with British mortgages by £ 6.1 billion. Deposits grew by £ 11.3 billion to £ 482.7 billion, as a result of solid customer confidence in the largest High Street Bank of the UK. Encouragingly, Lloyds also revealed improved economic outlooks, stimulated by recent house price growth and a more favorable assessment of risks such as inflation and interest rates.
According to Matt Britzman, Senior Equity analyst at Hargreaves Lansdown, the extra provision of £ 700 million “clouded”, which else was a strong fourth quarter. Britzman, however, emphasized that “Lloyds has succeeded in improving his loan quality during the course of the year, and the fear that borrowers would be stuck under the pressure of persistent inflation.”
Despite the profit mess, the stock price of the bank has risen more than 40 percent in the last 12 months, which is generally optimal outlook and consistent performance, away from motorcycle financing costs.