Lloyds Banking Group has reported a 36% drop in its earnings for the third quarter as it felt the impact of an extra £800 million charge to compensate customers unfairly sold a car loan.
The bank reported a pre-tax profit of £1.2 billion between July and September.
This was more than a third lower than the £1.8 billion made over the same period last year, although it came in above the £1 billion profit that most analysts were expecting.
The group’s latest results take into account it setting aside more money to cover potential costs related to the UK regulator’s motor finance compensation scheme.
It took an additional £800 million charge over the third quarter, bringing its total compensation bill to an estimated £1.95 billion.
Lloyds said its lending has grown over 2025, including mortgages, credit cards and motor finance.
Current account and savings account balances also grew this year as its customers spent less and saved more.
Chief executive Charlie Nunn said: “The group continues to perform well, demonstrating robust financial performance alongside strategic progress, including our recent acquisition of Schroders Personal Wealth.”
Mr Nunn said the bank benefited from income growth and cost savings “despite the impact of the additional motor finance charge in the third quarter”.
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