Lloyds, Europe’s second biggest bank by market value, has reports weaker than expected third-quarter results. The results came as its rival Barclays said it would pay incoming chief executive James “Jes” Staley up to 8.24 million pounds. Ciara Lee reports.
More mis-selling damage for Lloyds
It’s Europe’s second biggest bank by market value but it’s in the spotlight for the wrong reasons.
Weaker than expected third-quarter results saw underlying pre-tax profits fall to 2 billion pounds at Lloyds Banking Group, down from 2.2 billion for the same period last year.
Total income declined by 4 percent.
Lloyds has been forced to set aside a further 500 million pounds to compensate customers mis-sold loan insurance.
The new charge has brought the bank’s total PPI bill to nearly 14 billion pounds – more than double that of any other bank.
Shares were down over four and a half percent in early trade.
But CMC Markets’ Jasper Lawler says successes may be being overlooked.
(SOUNDBITE) (English) MARKET ANALYST, CMC MARKETS, JASPER LAWLER, SAYING:
“I think what is probably not getting enough attention is the rise in pre-tax profits. And just the projected profits for the year stands to be around 8 billion. That’s way up on the previous year.”
Another lender also facing scrutiny – Barclays.
It’s to pay incoming chief executive James or “Jes” Staley up to 8.2 million pounds a year.
Talk of big pay comes at a sensitive time for the bank.
It’s halfway through a three-year plan to cut 19,000 jobs.
. (SOUNDBITE) (English) MARKET ANALYST, CMC MARKETS, JASPER LAWLER, SAYING:
“Certainly the pay is large, but he is in charge of a large bank. I think the problem with pay is when it is unjustified. If results deteriorate, yet the size of the pay expands, obviously the incentives are messed up there.”
And those incentives – or challenges – are considerable.
Staley must improve the bank’s reputation after a series of scandals, cut its costs and improve its profitability.