Lloyds May Face $2.1 Billion Charge on Pension and PPI, UBS Says
- London-based bank may need funds to meet pensions liabilities
- Additional PPI charge will probably result in lower dividends
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Lloyds Banking Group Plc, Britain’s largest mortgage lender, may take a 1.6 billion-pound ($2.1 billion) charge in third-quarter earnings to cover a pension deficit and customer compensation, according to analysts.
The London-based bank may set aside 800 million pounds to cover its pension fund liabilities and a similar amount for customers who were wrongly sold payment protection insurance, analysts at UBS Group AG led by Jason Napier wrote in a note to clients on Friday. The charges could cut the bank’s 2016 dividend to 3 pence a share from a previous estimate of 3.8 pence, UBS added.