Lloyds profits as bad debts fall but mis-selling bill hits £8bn

Lloyds Banking Group almost doubled its profit in the last quarter but the tax-payer-backed group was stung with another £750m charge for mis-selling payment protection insurance, taking its total PPI bill to more than £8bn.

Lloyds' chief executive, Antonio Horta-Osorio, said that he welcomed any plans by the Government to include retail investors in the next sale of Treasury-owned shares, which could come early next year. They were excluded from the first, £3.2bn sell-off last month which cut the taxpayer stake from 39 per cent to 33 per cent.

Mr Horta-Osorio said: "Lloyds already has the largest retail shareholder base in the country, with more than 3 million individuals owning 12 per cent of the company. It is up to the Government on how and when the next sale takes place but we are absolutely sympathetic to extending the offer to retail investors."

A key part of that sale will be Lloyds' ability to restart paying dividends. It has already begun discussions with the banking regulator and will announce its policy at its full year results. However, Mr Horta-Osorio declared: "We are going to be a high-dividend-paying stock."

Headline profits rose from £831m to £1.52bn in the three months to the end of September as bad debts fell and the net interest rate margin earned by the bank rose.

Mr Horta-Osorio said: "The UK economic recovery is gathering pace, which has helped [in terms of] both lower impairments and higher margins."

He also pointed out that Lloyds has now sold or got out of all the major none-core businesses and countries that it planned to 15 months ahead of schedule. The latest big sell-offs included its German insurance arm.

Mr Horta-Osorio said Lloyds, and its subsidiary, had seen a "significant increase" in mortgage inquiries and applications since the launch of the Government's Help to Buy scheme. He explained: "These are primarily first- time buyers – young people who can meet the monthly repayments on their mortgages but could not necessarily raise the 20 per cent deposit needed to get on the housing ladder."

Lloyds also revealed that the costs of Project Verde – the 632 branches it was ordered to sell by the European Union as a condition of its £20bn bail-out – have increased by another £586m. That takes the total to £1.37bn, which includes the aborted sale of the business to the Co-op Bank and the subsequent relaunch of the branches as TSB with plans for it to be floated on the stock market in the middle of next year.

Lloyds' finance director, George Culmer, said this was still within the £1.6bn that he expected it to cost to create a standalone TSB.

However, he admitted there could be additional costs involved in the IPO and in running the two banks side by side for a time.

Co-op boss: 'I was never sure about Verde deal'

The former Co-operative Bank chief Barry Tootell has admitted he was concerned about its ill-fated deal for 632 Lloyds branches as early as 2011.

Mr Tootell yesterday told MPs on the Treasury Select Committee he was unsure whether the Project Verde takeover was in the Co-op's best interests after he took over from Neville Richardson in July 2011.

The £750m deal was scrapped this April as concerns mounted about the group's capital position. Mr Tootell quit a month later.

Jamie Dunkley

Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Sport
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
News
Robyn Lawley
people
PROMOTED VIDEO
News
people
News
i100  ... he was into holy war way before it was on trend
Life and Style
lifeDon't get caught up on climaxing
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
Arts and Entertainment
Harry Potter (Daniel Radcliffe), Hermione Granger (Emma Watson) and Ron Weasley (Rupert Grint)
newsBloomsbury unveils new covers for JK Rowling's wizarding series
News
scienceScientists try to explain the moon's funny shape
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
News
i100
Arts and Entertainment
As Loki in The Avengers (2012)
filmRead Tom Hiddleston's email to Joss Whedon on prospect of playing Loki
Voices
voices In defence of the charcoal-furred feline, by Felicity Morse
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star