Oct. 29 (Bloomberg) -- Lloyds Banking Group Plc, Britain’s biggest mortgage lender, posted a wider third-quarter loss after setting aside an additional 750 million pounds ($1.2 billion) to compensate clients wrongly sold loan insurance.
The net loss was about 1.3 billion pounds in the three months to the end of September from 390 million pounds in the year-earlier period, the London-based bank said in a statement today. It reported 626 million pounds of losses on asset sales.
Lloyds’s recovery, which saw the government sell 3.2 billion pounds of shares in the lender at a profit last month, has been blighted by past regulatory mistakes. The provision brings the total it has earmarked to redress customers sold payment protection insurance that didn’t cover them or they didn’t need to about 8.1 billion pounds, the most among the U.K.’s banks.
Some of the “reported numbers for Lloyds are pretty awful,” Ian Gordon, an analyst at Investec Plc in London with a hold rating on the stock, said by telephone. “An otherwise positive set of results were offset by one-off items that were a lot larger than had been anticipated.”
Pretax profit before one-time items climbed to 1.52 billion pounds from 831 million pounds in the year-earlier period, Lloyds said. That beat the 1.46 billion-pound median estimate of eight analysts surveyed by Bloomberg. Impairments for souring loans fell 47 percent to 670 million pounds.
The stock fell 2 percent to 78.01 pence in London trading, above the 61 pence the government says it will break even after providing a 20 billion-pound rescue almost five years ago. Lloyds has gained about 63 percent this year, the best-performing stock among its U.K. peers.
The bank, which is 33 percent government owned, has started discussions with the U.K. regulator about resuming dividend payments and will provide an update on timing at the year-end results, Chief Executive Officer Antonio Horta-Osorio, 49, said. Lloyds last paid a cash dividend in 2008, before its takeover of HBOS Plc led to its bailout by the government.
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