Issue link: https://maltatoday.uberflip.com/i/1150355
01.08.19 8 FOREIGN NEWS LLOYDS Banking Group has reported a 7% fall in half-year pre-tax profits as its bill for the payment protection in- surance scandal soared past £20 billion amid a surge in late claims. Shares in the lending giant fell 4% as it said pre-tax profits dropped to a worse-than-expected £2.9 billion for the six months to June 30 after reveal- ing another £550 million hit from the mis-selling saga in the second quarter. e extra provision for payment pro- tection insurance (PPI) came as the number of claims jumped ahead of the August 29 deadline, bringing its total in the half-year to £650 million – and the total for the scandal so far to a mam- moth £20.1 billion. On an underlying basis, Lloyds said pre-tax profits slipped 1% to £4.19 bil- lion in the six months to June 30. Lloyds chief executive Antonio Hor- ta-Osorio said that, while the economy has remained resilient amid Brexit, the "continuing uncertainty is having an impact and leading to some softening in business confidence as well as in inter- national economic indicators". But he insisted the group is "absolutely prepared for whatever happens" amid mounting fears that Prime Minister Bo- ris Johnson is putting the UK on course for a no-deal Brexit. Lloyds finance boss George Culmer said the level of PPI activity had "caught us by surprise", with between 190,000 and 200,000 requests for information now be- ing made each week, though only 10% of these are converted into actual claims. Other banks are set to confirm simi- lar increases in their PPI bills this week, with Barclays reporting on ursday and Royal Bank of Scotland on Friday. e Lloyds results showed that bot- tom-line figures were also hit by £182 million restructuring charges and £296 million of other costs, including a charge for ending its huge £100 billion contract with asset manager Standard Life Aberdeen. e results showed that the bank's re- tail lending business continued to come under pressure from intense competi- tion in the mortgage market, with its net interest income – a key measure performance for banks – dropping 3% in the first half to £4.4 billion. Its open mortgage book fell 1% to £264.9 billion, while its closed mortgage book dropped 11% to £19.8 billion. Lloyds said the mortgage market "stays tough", although it had seen a slight eas- ing in conditions in recent months. Richard Hunter, head of markets at in- teractive investor, said: "Yet another PPI provision of £550 million for the second quarter is unwelcome, leaving Lloyds counting the days until the 29th August deadline arrives and the issue can finally be consigned to the history books. "Meanwhile, competition in its im- portant mortgage market remains fierce, the historically low interest rate environment is not one which favours the banks in general and management outlook from the company is relatively subdued." Lloyds profits fall 7% as bank reveals more PPI pain GERMANY'S unemployment rate edged up to 5% in July as the sum- mer holidays weighed on hiring and worries increase about the strength of Europe's biggest economy. e Federal Employment Agency said that 2.275 million people were registered as jobless in July, 59,000 more than in June, but 49,000 fewer than July 2018. e unadjusted unemployment rate moved up to 5% from 4.9% in June. In seasonally adjusted terms, un- employment stayed at 5% for the third consecutive month. Senior agency official Daniel Ter- zenbach said "companies' demand for new employees is declining slightly" and employment is "still in- creasing but less dynamically". ING economist Carsten Brzeski said: "e industrial slowdown of the last 12 months is finally leaving its mark on the domestic economy and more particularly on the labour market". Rise in Germany's unemployment rate amid worries about economy Lloyds chief executive Antonio Horta-Osorio