What now for the Lloyds share price as PPI is put to bed?
Last week, Lloyds Q3 results revealed how last-minute PPI claims nearly wiped out the bank’s profits for the quarter. But with the PPI now over, how will it impact its share price?
Lloyds saw its shares fall by more than 2% on Thursday after its Q3 results revealed that last-minute PPI claims totalling £1.8 billion nearly 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 shares rebound after disappointing Q3 results
Horta-Osório’s sentiments about the overall health of the bank seem to be shared by investors, with the stock clawing back the losses it suffered in the wake of its Q3 results.
In fact, Lloyds shares gained 3.5% in the days following its quarterly earnings, trading at 58p a share as of 14:30 GMT on Monday.
Lloyds remains resilient despite challenges
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.
The stock has performed relatively well considering the challenges it is facing, with its share price up 14% on a year-to-date basis.
PPI related charges in its third quarter meant that the lender recorded just £50 million in profits in Q3, putting a significant dent in its bottom line over the first nine months of trading, down 40% to £2.9 billion.
Investors will be excited to see how the bank performs in its final quarter now that the PPI scandal has finally been put to bed.
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