28th Oct 2014 07:22
LONDON (Alliance News) - Lloyds Banking Group PLC Tuesday said it swung to a third-quarter pretax profit, as strong underlying growth more than offsett a new GBP900 million charge to cover the payment protection insurance mis-selling scandal.
In a statement, Lloyds said it made a GBP751 million pretax profit in the three months ended September 30, compared with a GBP440 million pretax loss in the corresponding quarter last year.
On an underlying basis, which excludes assets sales, costs associated with the spin-off of TSB Banking Group PLC, and the PPI charge, profit increased to GBP2.16 billion from GBP1.52 billion.
The bank, which is still 25%-owned by the UK government following its bailout during the financial crisis, said it is in ongoing talks with its regulator, the Bank of England's Prudential Regulation Authority, over resuming dividend payments.
The group also set out medium-term targets under a strategy update under which it expects to see 9,000 job cuts across its business while focusing on digital and information technology. Lloyds expects a net reduction of about 150 branches.
In the medium-term, Lloyds is targeting a cost:income ratio to exit 2017 at around 45%, with reductions in each year; a simplification run-rate savings of GBP1 billion a year by the end of 2017; an asset quality ratio of around 40 basis points through the economic cycle, and lower than this over the next three years; and sustainable returns on required equity of around 13.5-15% by the end of the strategic plan period and through the economic cycle.
By Samuel Agini; [email protected]; @samuelagini
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