British bank Lloyds: H1 loss narrows

Britain's state-rescued Lloyds bank said Thursday that it cut interim net losses on the back of restructuring measures, but set aside more cash to compensate customers who were mis-sold insurance. Losses after taxation narrowed to £676 million ($1.05 billion, 861 million euros) in the six months to the end of June, Lloyds Banking Group (LBG) said in a results statement. That compared with a vast net loss of £2.305 billion in the same period of the previous financial year, added LBG, which is 39.2-percent owned by the British government. Lloyds added that it has set aside another £700 million to compensate clients over mis-sold payment protection insurance (PPI). During 2011 and the first half of 2012, the group has now taken a total charge of £4.275 billion over the PPI scandal which has blighted the British banking sector. "These half-year results show a continuation of what we delivered in the first quarter: significant balance sheet reshaping and another resilient performance against a backdrop of economic challenges and a lack of public confidence in our industry," said chief executive Antonio Horta-Osorio. "We are on track to deliver our strategic aims and we are making significant progress with our financial targets. "We are building a stronger and safer group: one with a more robust balance sheet, lower exposure to risk and with lower operating costs. This is enabling us to increase our support to UK households, businesses and communities." The results were meanwhile published one week after LBG agreed to sell 632 branches at a loss to British financial services-to-food mutual business The Co-operative Group, following an EU competition ruling. LBG was ordered by the European Union to offload a chunk of its branches in exchange for a huge state bailout after the 2008 global financial crisis. Back in April 2011, British banks lost a high court appeal against tighter regulation of PPI, which provides insurance for consumers should they fail to meet repayments on a credit product such as loans, mortgages or payment cards. PPI became controversial after it was revealed that many consumers had been sold it without understanding that the cost was being added to their loan repayments. Britain has since banned simultaneous sales of PPI and credit products.