Annual profits

Lloyds Launches Wealth Campaign as Annual Profits Dip 72% to £ 1.2 Billion | Economic news

Lloyds Banking Group has announced that it will expand its insurance and wealth management business as lower interest rates and bad loan provisions hurt profitability.

The bank, which returned to private hands in 2017 following a taxpayer bailout during the financial crisis, revealed a 72% drop in pre-tax profits for 2020.

Much of the blow came from a charge of £ 4.2 billion for loans which are expected to deteriorate due to the COVID-19[female[feminine crisis, although the figure is lower than the range previously guided by the bank.

Antonio Horta-Osorio says Lloyds has met customer needs in 2020

As HSBC 24 hours earlier, Lloyds had announced it would further cut costs through a reduction in office space – by a fifth over three years – following a review that led to a series of job cuts as the pandemic took its toll last year.

The bank, which is the UK’s largest mortgage lender, said it would increase customer funds in insurance and wealth by £ 25bn by 2023 as returns loans would crack due to record interest rates.

Metro Bank, which has warned its investors it expects defaults to increase this year after recording a larger underlying annual loss of £ 271.8million for 2020.

He was in the red at just £ 11.7million in 2019.

The so-called challenger bank, which has focused on servicing street branches at a time when rivals are closing, estimated the pandemic would cost it £ 124million in spending on lost credit and lower transaction fee income.

Like its main rivals, Lloyds has announced that it will resume dividend payments – blocked last year by the Bank of England – with an allotment of 0.57 pence per share.

He also confirmed that Charlie Nunn, an HSBC executive previously announced as Antonio Horta-Osório’s successor, would take over in August.

Charlie Nunn to take over at Lloyds in 2021
Charlie Nunn to become CEO of Lloyds on August 16

Mr. Horta-Osório, who oversaw Lloyds’ post-crisis recovery, leaves after a decade and plans to become chairman of Credit Suisse.

He told investors the bank was focused on contributing to a sustainable economic recovery after the virus crisis.

“The group’s unique business model, customer-focused strategy and transformation over the past few years have positioned us well to effectively meet the needs of our customers in 2020,” he said.

“At the same time, the group’s financial performance during the year was impacted by the pandemic.

“We are now seeing positive developments in the business, including growth of £ 10.2bn in the open mortgage portfolio in the second half of the year and total deposits up £ 39bn during the year. year, the latter given the reduction in retail spending and entries to our trusted brands. “

Shares rose 4% at the open, but the gains then mostly faded and were only 0.3% higher at the close.

Dan Lane, senior analyst at investment platform Freetrade, highlighted the bank’s claim that the dividend was the maximum the bank was allowed to pay.

But he added: “The regulator will not be the scapegoat forever and the dividends come from the bank making enough money to keep investors on board.

“For now, it won’t be on the radar of many income hunters and the longer its dividend stays at those levels, the more likely it is to lose the market place altogether.

“It is promising to see intentions to return to a sustainable income policy. It looks like the industry as a whole has a lot of bad debts to deal with first.”

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