Bank rises

Lloyds posts surge in profits, Bostock joins board

Nathan Bostock joins the board of Lloyds Banking Group

Lloyds Banking Group  posted an all-time high pretax profit of £7.5bn for 2023, up 57% from £4.8bn in 2022.

Charges for bad debts fell sharply to £308 million. However,  profits in the fourth quarter slipped 4% due to mortgage pricing and the group has set aside £450m to cover the potential costs of regulatory probes into historic motor finance commission arrangements.

The Financial Conduct Authority last month said it would investigate discretionary commissions on car financing deals dating back a decade, saying the agreements gave lenders and dealers incentives to lift the interest rate levied on customers.

Analysts are concerned that the probes could end up costing the industry billions of pounds. Lloyds owns Black Horse, the UK’s largest motor finance provider.

The group, which includes Bank of Scotland, Halifax and Scottish Widows, also announced it was planning a £2bn share buyback, which together with a 1.84p per share final dividend would see £3.8bn returned to shareholders, taking the final payout to 2.76p, up 15%.

Uberior House, Lloyds
Lloyds has a big presence in Scotland

The bank announced that Nathan Bostock, former CFO at Royal Bank of Scotland and CEO at Santander UK, will replace Alan Dickinson as a non-executive director and will become chairman of Lloyds Bank Corporate Markets. Mr Dickinson will step down as deputy chair at its 2024 annual general meeting.

Mr Bostock was CEO of Santander UK from 2014 until 2022. Prior to joining Santander, he was an executive director and group chief financial officer of The Royal Bank of Scotland and previously held the post of chief risk officer at RBS.

Sir Robin Budenberg, Lloyds group chair, said “Nathan brings extensive capital markets and wider financial services experience, in particular from his chief executive and chief risk officer roles. His deep knowledge of the UK banking market will be invaluable to his roles with the group.”

Market reaction

John Moore, senior investment manager at RBC Brewin Dolphin, said: “It’s another steady set of results from Lloyds, with profits in line with forecasts for the quarter and full year.

“The bank, like many of its UK peers, is on a path of cost control and robust trading, underpinning its ability to return capital to shareholders.

“The £450 million set aside to cover a regulatory probe into historic car finance issues is the one fly in the ointment in an otherwise relatively upbeat update.

“Longer term, there are strategic questions for Lloyds to consider – such as its plans for Scottish Widows – but for now the bank is in a good position and performing well.”

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