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04/08/2010
Lloyds Returns Double Expected Profit
Charging customers more for borrowing is helping to turn around the fortunes of one of the UK's top banks.
Part-nationalised Lloyds's new £1.6bn profit statistic is said to reflect it being one of the more expensive high street banks for authorised and unauthorised borrowing
Lloyds Banking Group's return to profit indicates the group is making plenty of money from its customers.
The 41%-state owned lender, has returned to the black with the bumper first-half profits - double those expected being a further sign that the worst of the financial sector's bad debt crisis is over.
However, much of the reported profit has come from charging for unauthorised overdrafts - even though the bank was recently forced to reduce its unauthorised banking charges in response to complaints from customers.
The move will make Lloyds TSB more competitive on unauthorised overdrafts but still not the cheapest on the market.
A Classic Plus account holders who gets a £50 overdraft without an agreed facility the bank will currently charge £60 plus 8p in fees plus interest, compared to £35 plus 8p from December.
Barclays and Halifax charge £22 and £15 respectively, while HSBC and First Direct do not charge anything if it is the first time a customer has been overdrawn in six months.
Other changes to be introduced by Lloyds TSB in December include a £5 fee for any month in which a customer makes use of a planned or unplanned overdraft.
The bank said it made money in the first three months of the year and expects to deliver a profit for the whole of 2010 as losses on bad debts continue to fall.
Lloyds' strong results followed HSBC's reporting on Monday of a more-than-doubling in first-half profits to £7.1bn and a return to profits for the combined Northern Rock - 'good' bank and 'bad' bank.
(BMcC/GK)
Part-nationalised Lloyds's new £1.6bn profit statistic is said to reflect it being one of the more expensive high street banks for authorised and unauthorised borrowing
Lloyds Banking Group's return to profit indicates the group is making plenty of money from its customers.
The 41%-state owned lender, has returned to the black with the bumper first-half profits - double those expected being a further sign that the worst of the financial sector's bad debt crisis is over.
However, much of the reported profit has come from charging for unauthorised overdrafts - even though the bank was recently forced to reduce its unauthorised banking charges in response to complaints from customers.
The move will make Lloyds TSB more competitive on unauthorised overdrafts but still not the cheapest on the market.
A Classic Plus account holders who gets a £50 overdraft without an agreed facility the bank will currently charge £60 plus 8p in fees plus interest, compared to £35 plus 8p from December.
Barclays and Halifax charge £22 and £15 respectively, while HSBC and First Direct do not charge anything if it is the first time a customer has been overdrawn in six months.
Other changes to be introduced by Lloyds TSB in December include a £5 fee for any month in which a customer makes use of a planned or unplanned overdraft.
The bank said it made money in the first three months of the year and expects to deliver a profit for the whole of 2010 as losses on bad debts continue to fall.
Lloyds' strong results followed HSBC's reporting on Monday of a more-than-doubling in first-half profits to £7.1bn and a return to profits for the combined Northern Rock - 'good' bank and 'bad' bank.
(BMcC/GK)
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