(Bloomberg) — Lloyds Banking Group Plc’s profit was wiped out by a fresh 2.4 billion-pound ($3.1 billion) charge for bad loans in the second quarter as the lender braces for more pain from the coronavirus pandemic.Britain’s biggest mortgage lender said Thursday it now expects to set aside between 4.5 and 5.5 billion pounds during this year to cover the economic fallout from months of lockdown and the end of government support programs.“The outlook has clearly become more challenging since our first quarter results, with the economic impact of lockdown much larger than expected at that time,” said Chief Executive Officer Antonio Horta-Osorio.Shares in the bank fell as much as 8.3% in early trading in London.Lloyds is the latest U.K. bank preparing for a more severe recession, even as customers continued to repay their debts as expected in the past three months. The lender’s severe scenario includes a spike in unemployment to 12.5% and a contraction of 17.2% this year.About 50,000 of the bank’s 65,000 staff are working from home to help slow the spread of the coronavirus. Horta-Osorio told reporters the bank would like to bring workers back “where possible,” although people are staying home until at least September and could work flexibly in future, meaning the bank becomes less reliant on office space.Lloyds posted a statutory pretax loss of 676 million pounds for the second quarter, more than analyst forecasts. Its provision, which was 1 billion pounds above analyst forecasts, comes a day after rival Barclays Plc announced a higher than predicted charge to cover bad loans.European banks including Lloyds suspended dividends to conserve capital during the pandemic, following pressure from regulators. Lloyds also paused its 1.75 billion-pound share buyback program last September after booking additional provisions for mis-sold insurance. The board will discuss restarting dividends at the end of the year, it said Thursday.(Adds detail on provisions and working from home from fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
from Yahoo Finance https://ift.tt/39FJ4Iw
Leave a Reply