Of Special Interest
Filters
- Newslink Trends-The Global Strategic Perspective
- Juniper Research says digital wallet users to exceed 4.4 billion by 2025, as mobile drives digital payments’ revolution
- Criminals exploit COVID-19 pandemic with rise in scams targeting victims online
- Equifax says Open Banking proving pivotal to pandemic lending
- Consumer confidence in banks, credit card providers and investments remain stable as demand supercharges digital finance says Toluna research
- Mintos says Europeans are starting to embrace investing
- US banks see IT modernisation as a way to improve customer experience
- Risk mitigation in global trade depends on digitisation-Andrew Raymond, CEO, Bolero International comments
- Juniper Research new study says the volume of B2B payments facilitated by non-banks will exceed 53 billion in 2022, from a COVID-related low of 38 billion in 2020
- CMA issues fifth publication over 3 years of the service quality league table of personal and business current account providers
- Barclays says scammers take advantage of COVID-19, cashing in on nations’ uncertainty
- S&P Global report says financial market infrastructure sector's earnings likely to cool off In second half
- Global banking market capitalisation slumps by over 30% amid pandemic says Buyshares research
- Digital wallet spend in Europe & North America to increase by 40% in 2019, finds study
- Juniper forecasts mobile money transactions will exceed 200 billion by 2024
- Banks can save the world from climate change, says former UN climate chief
- Research by NatWest reveals gender divide over attitudes to saving
- Europe’s big bank problem: too much capital is trapped in the US, says Scope
- Later-Life lending market set to almost double in the next 10 years, finds report
- Barclays/Cebr report challenges nation to think differently about wealth
- Fifth of UK investors looking to debt investment, new research reveals
- Regtech will play a more important role in PSD2, says Mitek
- Banks turn to Fintech partnerships to improve customer experience, finds Fraedom
- New industry code to tackle fraud must deliver, says Which?
- New TTF report highlights loss of trust in financial services
- Arxan highlights financial app vulnerability epidemic
- SAS asks whether banks really need to choose between operations and innovation
- Which? raises alarm as almost 1,700 free ATMs become fee-charging
- Financial wellness affects half of peoples’ mental or physical health, finds report
- Study finds traditional financial institutions embrace Fintech disruption
- Grass is greener for environmentally friendly businesses, finds Barclays
- Prospective homeowners would consider a 40-year mortgage to escape renting, finds Santander
- Millennials’ needs are changing the face of banking industry, says new report
- FS is putting consumer data at risk by failing to protect mobile apps, says Arxan
- A lack of belief in their ability holds 28% women back in work, says Cambridge & Counties
- ‘Which?’ reveals Scotland has lost over a third of its bank branches in eight years
- Next downturn unlikely to be as bad as 2008, according to S&P
- FCA reveals findings from first cryptoassets consumer research
- US consumers favour single mobile app for banking and payments
- Banks suffering major IT shutdowns every day, ‘Which?’ reveals
- The US will be a key offshore centre in 2019, says GlobalData
- Debit industry changes markedly in 10 years of the Debit Issuer Study
- UK's ‘Big Five’ face ‘too big to compete’ as small challengers secure stellar returns
- Banks as vulnerable now as before crash, says new study
- Leverage ratio a constant conundrum for European and US banks, says SNL
11th November 2011
Lloyds Banking LOSS
Lloyds Banking Group reported 9 month net attributable LOSS of £2,824m (€3,291m $4,538m ¥353.8bn Y28,800m) versus year ago profit of £1,523m. Quarterly profits were only provided at the profit before tax level which amounted to a Q3 LOSS of £607m (€707m $975m ¥76.1bn Y6,190m) compared with a year ago profit of £671m. Heavily shaping the 9 month loss was the £3.2bn charge for the mis-selling of Payment Protection Insurance taken in Q2 - Lloyds having been by far the most aggressive seller of this insurance. Lower income, higher costs and fair value writedowns were also factors in the LOSS.
The good news is that Lloyds exposure to the PIIGS sovereign debt countries and Belgium (an interesting addition to the dubious countries group) is less than £200m. Even adding exposure to banks and ABS from the same group of countries the figure remains below £5.4bn. Debt value adjustment is not a major distortion because the market value never rose enough for a fall to be significant although it would have been helpful for the figure to have been provided.
Yet the bank is not without problems. First, it announced that it may not meet its financial targets for 2012. Second, the absence of CEO, António Horta-Osório. Losing a CEO for sickness reasons would be a blow to any major organisation but is made many times worse because Horta-Osório has either removed all of the experienced top management or they have decided to leave, with him bringing in his own men. The bank was resorted to appointing a man serving his notice as temporary CEO, and who is said that he will leave at the end of March come what may. At this time not having a leader to clearly enunciate strategy is a serious weakness. Third, Moody's has the bank on credit watch and is very likely to downgrade the bank. Expenses are only discussed under the 'combined business basis' and despite the increase YTD the bank states that it expects full year expenses on this basis (only?) to be lower than in 2010.
Credibility is not helped by the bank continuing to highlight 'the combined business basis' profitability. This reads like a wish list, excluding anything bad that has happened to the bank and markets - such as PPI charges, reduction in asset values etc. When all these factors are excluded then the bank is magically shown in profit. It also raises the question as to whether the bank will be so fast to exclude fair value when it is rising and charges when they relate to last year and not the current year.
Income Statement 9 months 2011 2010 Change
£m £m %
Interest and similar income 20,308 21,699 -6
Interest and similar expense -10,375 -12,303 -16
___________________________
Net interest income 9,933 9,396 6
Fee and commission income 3,292 3,381 -3
Fee and commission expense -1,116 -1,282 -13
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Net fee and commission income 2,176 2,099 4
Net trading income -5,732 9,725 --
Insurance premium income 6,187 6,166 0
Other operating income 1,703 3,161 -46
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Other income total 4,334 21,151 -80
Total income 14,267 30,547 -53
Insurance claims 843 -11,616 --
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Total income, net of insurance claims 15,110 18,931 -20
Payment protection insurance provision -3,200 – --
Other operating expenses -9,772 -9,131 7
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Total operating expenses -12,972 -9,131 42
Trading surplus 2,138 9,800 -78
Impairment -6,017 -7,734 -22
Share of results of joint ventures and associates 21 -99 --
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(Loss) profit before tax -3,858 1,967 --
Taxation 1,079 -367 --
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(Loss) profit for the period -2,779 1,600 --
Profit attributable to non-controlling interests 45 77 -42
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(Loss) profit attributable to equity shareholders -2,824 1,523 --