Lloyds Banking Group has reported profits of £958 million in the third quarter, up from £751m in the same period last year.
But underlying profits fell from £2.16 billion to £1.97bn due to tough trading in its commercial banking division. In fact, commercial banking was so tough that overall revenues fell 4% as a result.
The group, which is still 12% owned by the taxpayer, set aside a further £500m for PPI costs, down from £900m last year. Lloyds has now set aside nearly £14bn for the PPI scandal.
Earlier this month, the Financial Conduct Authority (FCA) said it is considering a deadline for claims over mis—sold PPI in 2018.
Lloyds' net interest margin, a key indicator of its profitability, has risen from 2.47% to 2.64%. The banking giant said it expects the margin to be at 2.63% for the rest of the year, above forecasts of 2.6%.
António Horta Osório, Lloyds chief executive, said in a statement: “Our financial performance continues to demonstrate the strength of our business model.
Chancellor George Osborne recently announced that around £2bn of Lloyds shares will be made available to private investors in the spring.
The shares will be sold with a 5% discount to Lloyd’s market price, with anyone applying for shares for less than £1000 being the priority.
Owners who keep their shares for at least a year and have 10 purchased will receive a bonus share in return.