Lloyds Banking Group’s profits have more than doubled as the bailed-out bank shrugged off the Brexit vote and avoided further hefty charges for payment protection insurance mis-selling.
Its profits of £4.2bn are the highest for a decade and shares in the bank rose by 4%.
The bonus pool at the bank, in which taxpayers own a stake of just under 5%, increased by 11% while its chief executive, António Horta-Osório, was paid £5.5m for 2016.
Unlike at rival bailed-out bank Royal Bank of Scotland, shareholders are receiving a dividend of 3.05p a share, including a special payment of 0.5p.
Speculation has swirled that the Portuguese banker will walk away once the final part of the taxpayer’s holding in the bank is sold off – probably by May. However, he said: “The job is never done. I’m very happy at Lloyds.”
The bank’s profits have been weighed down in recent years by the cost of bad lending at HBOS – the bank that Lloyds took over during the 2008 financial crisis – and £17bn of charges to cover PPI compensation.
The bank avoided taking another provision for PPI in the last quarter of the year, which helped bolster its profits from £1.6bn a year ago. Underlying profits were down.
Even so, the bank’s total PPP charge for the full year amounted to £1bn – down from £4bn a year ago. It also took another charge of £1bn during the year for other compensation payouts, including a new £475m provision in the fourth quarter for complaints related to packaged bank accounts and other problematic products.
