Troubled Lloyds is back in the black
Published 02/08/2013 | 01:30
Lloyds Banking Group has shown impressive signs of recovery as it recorded a profit of £2.1bn for the year so far – a major turnaround for the taxpayer-backed bank since losses of £450m for the same period last year.
The results beat expectations, including a 43% reduction in bad debts and a significant overall reduction in costs, and sparked speculation that the Government could now sell its 39% stake.
Shares jumped up in value around 8% in trading yesterday, climbing higher than the average price of 73.6p the taxpayer paid in the £20bn bailout of 2008.
Chief executive Antonio Horta-Osorio said: "The share price is now in a position where the Government can return taxpayers' money at a profit."
Mr Horta-Osorio said it was up to the Government to decide "when and how" to sell its stake.
A Treasury spokesman said: "Today's half-year results show that Lloyds continues to make progress towards becoming a stronger and safer bank.
"The Government has set out its plan to take Britain's banking system from rescue to recovery. As part of this, we have said that we are now actively considering options for sales of the taxpayers' shares in Lloyds."
It wasn't all good news for the taxpayer-backed bank, however. Compensation settlements and fines for miss-sold Payment Protection Insurance continued to impact on profit margins, and it was forced to set aside another £450m to deal with claims, taking the cost of legal actions to £7.3bn.
The bank also had to put aside £50m for an investigation by the Financial Conduct Authority.