Lloyds share price slides after last-minute PPI claims wipe out Q3 profits
The lender saw its share price fall on Thursday after revealing that £1.8 billion worth of PPI claims almost entirely wiped out its third quarter profits.
Lloyds saw its shares fall on Thursday after its Q3 results revealed that last-minute PPI claims totalling £1.8 billion have almost entirely wiped out the bank’s profits for the quarter.
‘I am disappointed that our statutory result was significantly impacted by the additional PPI charge in the third quarter, driven by an unprecedented level of PPI information requests received in August,’ Lloyds Group CEO António Horta-Osório said.
‘However, our performance continues to demonstrate the resilience of our customer franchise and business model, the strength of our balance sheet and that our strategy is the right one in this environment.’
Lloyds share price remains resilient
PPI related charges in its third quarter meant that the lender recorded just £50 million in profits in Q3 and put a significant dent in its bottom line over the first nine months of trading, down 40% to £2.9 billion.
Its disappointing set of results sent its shares 2% lower on Thursday morning to trade at 56p as of 10:30 GMT. However, the stock has performed relatively well considering the myriad of challenges the UK banking sector is facing, with its share price up 9% on a year-to-date basis.
You can go long or short Lloyds with IG using derivatives like CFDs.
Lloyds perseveres despite uncertainty
Despite its latest results, Lloyds financial performance has been relatively solid, with the bank battling against a cocktail of headwinds including a competitive mortgage market and a low interest rate environment squeezing margins.
Lloyds owns the UK’s largest mortgage lender Halifax, which is likely to continue to struggle until Brexit is resolved.
‘We will maintain our prudent approach to growth and risk whilst continuing to focus on reducing costs and investing in the business to transform the group for success in a digital world,’ Horta-Osório said.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets