Lloyds profit dips on £800m car loan scandal charge
Lloyds Banking Group reported a 14 percent decline in net profit for the first three quarters as Britain’s financial regulator ordered lenders to compensate customers over unlawful auto financing arrangements. The bank allocated an additional 800 million pounds to address the scandal, bringing total expected payments to 1.95 billion pounds. Profit after tax fell to 2.9 billion pounds from January through September compared with the same period last year.
The Financial Conduct Authority proposed earlier this month that banks pay 8.2 billion pounds to resolve approximately 14 million unfair motor finance agreements dating back to 2007. Some dealers received commissions for setting higher interest rates without properly disclosing this practice to borrowers. Chief Executive Charlie Nunn said the company remains confident about annual performance despite the charges. Barclays set aside 325 million pounds on Wednesday for similar compensation obligations.
