Lloyds half year profits hit by PPI mis-selling charges

Profit at Lloyds Banking Group has fallen by more than 50% in the first six months of the year compared with the same period in 2013.

Pre-tax profit fell to £863m after a £1.1bn charge for “legacy issues”. These included £600m set aside for mis-sold PPI and £226m to cover a Libor rate-rigging settlement.

However, Lloyds said it would go ahead with plans to restart dividend payments to shareholders.

The Bank’s total bill for mis-sold PPI now stands at more than £10bn, after it set aside an extra £600m to compensate customers.

On Monday, US and UK financial authorities fined Lloyds £218m for “serious misconduct” over some of the key interest rates set in London.

Regulators found that Lloyds rigged rates including the London interbank offered rate (Libor) for Yen and Sterling, and tried to manipulate the rate for yen. Sterling and the US dollar.

Lloyds Group is part-owned by the government, which holds a 24.9% stake.

Its TSB business, which was floated on the stock market in June, saw underlying profits fall about 17% to £78.6m. It attributed the fall to its no longer being able to benefit from the economies of scale that has been open to it as part of a larger group.