Business

Lloyds sees profits rocket to £6.9bn but reveals fraud hit

Lloyds Banking Group has become the latest lending giant to post a bumper annual profit haul after releasing Covid loan loss provisions thanks to the UK's economic recovery

LLOYDS Banking Group has become the latest lending giant to post a bumper annual profit haul after releasing Covid loan loss provisions thanks to the UK's economic recovery.

The group reported pre-tax profits surging to £6.9 billion in 2021, up from £1.2 billion the previous year, though the figure came in below City expectations.

The lending giant said results were boosted as it booked a £1.2 billion credit from provisions for bad debts, having set aside £4.2 billion the previous year, while it also benefited from a boom in mortgage demand.

Lloyds said its mortgage book surged £16 billion to £293.3 billion last year.

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

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

Recently appointed chief executive Charlie Nunn unveiled what he called an "ambitious" strategy alongside the results, promising a "significant shift" towards growth, more diversified revenues, greater efficiency and investing further in data and technology.

He said: "2021 has been a year of solid financial performance."

He added: "I am confident that the group's purpose, customer focus, unique business model and significant competitive strengths, embodied in our ambitious strategy, will ensure the group is able to deliver higher, more sustainable long-term returns and capital generation for our shareholders, whilst meeting the needs of broader stakeholders."

The figures cap a slew of impressive results from the major players in the sector, following profits of £8.4 billion at Barclays, HSBC's mammoth 18.9 billion US dollar (£13.9 billion) earnings and £4 billion in operating profits at NatWest.

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