The Halifax based banking group has been forced to take another hefty charge from the PPI scandal.
The group, which owns Halifax Bank, said it would take a £1.8bn charge from PPI claims over the third quarter of the year. This is at the top of the £1.2bn to £1.8bn charge Lloyds had advised markets to expect.
This ate into the firm’s pre-tax profit, which rose to £2.9bn in the first nine months of the year, below analyst expectations of £3.06bn.
Lloyds’ chief executive Antonio Horta-Osorio said the group made strong strategic progress in the first nine months of 2019, delivering a solid financial performance in a challenging external environment.
“I am disappointed that our statutory result was significantly impacted by the additional PPI charge in the third quarter, driven by an unprecedented level of PPI information requests received in August,” he said.
“However, our performance continues to demonstrate the resilience of our customer franchise and business model, the strength of our balance sheet and that our strategy is the right one in this environment.”
Russell Galley, managing director at Halifax, said the bank has received some “fantastic feedback” on Halifax’s new Family Boost campaign.
“As part of our commitment to lending £30bn to first-time buyers by 2020, we launched a new mortgage in September that offers families a way to give the next generation the boost that they need to get on to the property ladder, while providing competitive rates to both buyer and supporter,” he said.
Halifax’s Family Boost is designed to help first-time buyers without a deposit, using savings from parents or other family members to provide security for 10 per cent of the loan.
“While increasing numbers of first-time buyers is good news for the housing market and not far off the peak of the last boom –which was just under 190,000 in 2006 – it’s saving enough to get a foot in the door that’s still the biggest blocker,” said Mr Galley.
He said the Halifax is helping more people to own their own home in a market where the average price for first-time homes has risen from £138,413 in 2009 to £224,709 – a 61 per cent rise in the past decade. This is against a backdrop of a 51 per cent rise in house prices across the market.
“I’m extremely proud to have opened our first new space dedicated to home-buying just a few weeks ago,” added Mr Galley.
“We understand the challenges people can face when attempting to set foot on, or move up, the housing ladder and have created what’s thought to be the first of its kind in the UK – bringing together experts in home buying, interactive experiences and special events under one roof.
“The first Home by Halifax space is designed to make the process simple, with extended opening hours and specially trained staff on hand to help people achieve their home goals.”
The Halifax has also created a new online tool to help people track down a new remortgage deal in a “quicker and more convenient” way.
“Also a first of its kind in the market, our Mortgage Finder searches for the best matches based on what matters to people most – paying off the mortgage sooner or having lower monthly payments – without simply crunching the usual numbers,” said Mr Galley.
Lloyds said it will maintain a prudent approach to growth and risk, whilst focusing on reducing costs and investing in the business.