Lloyds Banking Group PLC, Britain’s largest mortgage lender, said it is on track to meet full-year targets despite increasing its quarterly impairments by almost one third.
Loan impairments rose to ￡270 million (US$354 million) in the three months ended Sept. 30 from ￡204 million in the same period a year ago, the bank said in a statement yesterday.
There was a “single large corporate impairment” in the third quarter of the year, without specifying details, the bank said.
“We have announced improved financial targets for 2017, reflecting the strong financial performance in the year and we remain on track to deliver our longer-term guidance,” chief executive officer Antonio Horta-Osorio said in the statement.
Lloyds has grown in riskier consumer finance with the acquisition of Bank of America Corp’s MBNA UK credit card division for ￡1.9 billion in December last year in an attempt to diversify the bank’s mortgage-dominated balance sheet. The bank also has the biggest exposure to consumer car finance among Britain’s banks, though it represents only about 3 percent of its balance sheet.
The Bank of England is to examine resilience to consumer credit within its stress tests of banks this year as motor finance experiences growth that is outpacing household incomes.
The bank is preparing to outline a new strategy for growth in February next year, which analysts expect will involve further cost reductions and investment in technology after the bank eliminated thousands of jobs.
The government sold its last remaining shares in the firm in May some eight years after its bailout, but Lloyds, which has 97 percent of its business in the UK, remains wedded to the fortunes of the economy as the government negotiates Brexit and edges toward its first interest-rate increase for a decade.
Pretax profit for the third quarter more than doubled to ￡1.95 billion. Excluding exceptional charges, Lloyds reported a pretax profit of ￡2.1 billion, in line with the average estimate of three analysts compiled by Bloomberg News.
It is to consider a special dividend or share buyback at the end of the year after the bank generated more capital than expected, Lloyds said.
However, any payouts are dependent on the UK regulator’s pending final decision on a key capital buffer.
The lender now forecasts capital generation of between 225 and 240 basis points this year from a previous guidance of 170 to 200 basis points. The bank’s common equity Tier 1 ratio, a measure of financial strength, rose to 14.9 percent in the quarter, exceeding the assumed minimum of 13 percent, the statement said.
The bank’s shares fell as much as 2.8 percent and were 1.7 percent lower at ￡0.6623 as of 8:22am yesterday in London.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
RSS