And while Lloyds shares have risen lately, they have performed far better than Close Brothers – where car finance is a far larger portion of business, meaning that it has more to lose – and where the shares are down 60 per cent since the start of last year.
Net interest margin – a measure of the difference between money earned on loans and what the bank pays out on savings – was 2.95 per cent, from 3.11 per cent a year earlier.
Matt Britzman, an analyst at Hargreaves Lansdown, said: ‘While you could argue the provision is overly cautious, Lloyds holds the largest exposure of any major UK bank, and the outcome remains uncertain.’.
Lloyds Banking Group revealed it has set aside £1.2billion to cover a car loans misselling scandal as profits tumbled 20 per cent.
Lloyds, led by chief executive Charlie Nunn (pictured), said yesterday that the £1.2billion provision is the ‘best estimate of the potential impact’ but there was significant uncertainty in terms of the final outcome.
