Lloyds Bank profits rise as lender’s mortgage portfolio hits £293bn

Thursday, February 24, 2022 8:05 a.m.

Lloyds Banking Group has become the latest credit giant to post a bumper annual profit after releasing loan loss provisions from Covid thanks to the UK’s economic recovery.

The group reported pre-tax profits reaching £6.9bn in 2021, up from £1.2bn the previous year after releasing provisions for Covid loan losses thanks to the UK economic recovery.

The credit giant said results had been improved as it set aside a £1.2bn loan from bad debt provisions, after setting aside £4.2bn the previous year, while also benefiting from a boom in mortgage demand.

Lloyds said its mortgage portfolio jumped by £16bn to £293.3bn last year.

The group said it would buy back £2bn of its own shares and pay a final dividend of 1.33p per share.

But it revealed charges for past misdeeds of £1.3billion in the year, with a hit of £775million in the fourth quarter, including £600million for the HBOS reading scandal, which took place before the financial crisis.

Newly appointed chief executive Charlie Nunn unveiled what he called an “ambitious” strategy alongside the results, promising a “significant shift” towards growth, more diversified revenue, greater efficiency and additional investment in data and technology.

“2021 was a year of strong financial performance.”

General Manager Charlie Nunn

He added: “I am confident that the group’s purpose, customer focus, unique business model and significant competitive advantages, embodied in our ambitious strategy, will enable the group to deliver higher long-term returns and more sustainable and a generation of capital for our shareholders, while meeting the needs of broader stakeholders.

The figures cap a series of impressive results from major players in the sector, after profits of £8.4bn at Barclays, the mammoth profits of US$18.9bn (£13.9bn) at HSBC and £4 billion in operating profit at NatWest.

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