Lloyds Banking Group fell to loss in the second quarter, after warning that the UK’s lockdown had a “much larger than expected” impact on the economy.
The lender put aside a further £2.4bn to deal with expected customer defaults, up from £1.4bn in the first three months of the year. There was a particularly large jump in provisions for soured mortgage loans, which the bank blamed on an “additional reduction in house price forecasts” since its last trading update.
Mortgages had largely been excluded from the first wave of coronavirus-induced loan loss provisions earlier this year, but the announcement from Lloyds on Thursday follows a similar report from smaller rival Virgin Money, which warned on Monday about the impact of rising unemployment.
Lloyds, the UK’s largest retail bank, added that it had seen some signs of improvement in recent weeks, with rising levels of consumer spending and housing market activity. However, it said the outlook “remains highly uncertain and the impact of lower rates and economic fragility will continue for at least the rest of the year.”
The bank slumped to a pre-tax loss of £676m in the second quarter compared with a pre-tax profit of £1.3bn a year ago.
Overall revenues at the bank for the three months to June fell 21 per cent year-on-year, to £3.5bn, with lower demand and lower interest rates both weighing on income. Operating costs fell 6.5 per cent.
António Horta-Osório, Lloyds chief executive, said the pandemic had had a “profound impact on the way we live our lives and on the global economy”, but said the company was well-placed “to help Britain recover”.
https://news.google.com/__i/rss/rd/articles/CBMiP2h0dHBzOi8vd3d3LmZ0LmNvbS9jb250ZW50L2E2YzQ0ZDZmLTI4ZjAtNDdlMi1iZmNhLWI4ODBmMjhmYmZkNdIBP2h0dHBzOi8vYW1wLmZ0LmNvbS9jb250ZW50L2E2YzQ0ZDZmLTI4ZjAtNDdlMi1iZmNhLWI4ODBmMjhmYmZkNQ?oc=5
2020-07-30 06:46:17Z
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