Lloyds share price slides after last-minute PPI claims wipe out Q3 profits

Lloyds saw its shares fall on Thursday after its Q3 results revealed that last-minute PPI claims totalling £1.8 billion have almost entirely wiped out the bank’s profits for the quarter.

‘I am disappointed that our statutory result was significantly impacted by the additional PPI charge in the third quarter, driven by an unprecedented level of PPI information requests received in August,’ Lloyds Group CEO António Horta-Osório said.

‘However, our performance continues to demonstrate the resilience of our customer franchise and business model, the strength of our balance sheet and that our strategy is the right one in this environment.’

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Lloyds share price remains resilient

PPI related charges in its third quarter meant that the lender recorded just £50 million in profits in Q3 and put a significant dent in its bottom line over the first nine months of trading, down 40% to £2.9 billion.

Its disappointing set of results sent its shares 2% lower on Thursday morning to trade at 56p as of 10:30 GMT. However, the stock has performed relatively well considering the myriad of challenges the UK banking sector is facing, with its share price up 9% on a year-to-date basis.

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Lloyds perseveres despite uncertainty

Despite its latest results, Lloyds financial performance has been relatively solid, with the bank battling against a cocktail of headwinds including a competitive mortgage market and a low interest rate environment squeezing margins.

Lloyds owns the UK’s largest mortgage lender Halifax, which is likely to continue to struggle until Brexit is resolved.

‘We will maintain our prudent approach to growth and risk whilst continuing to focus on reducing costs and investing in the business to transform the group for success in a digital world,’ Horta-Osório said.