Lloyds Sets Aside Another £2.4 Billion to Cover Potential Bad Loans

Lloyds Banking Group is preparing for a surge in customer defaults, after Britain’s largest retail bank warned that the coronavirus crisis had inflicted more damage on the economy than it had expected, the Financial Times reported. The bank’s shares tumbled more than 7 per cent on Thursday to their lowest level in eight years after the lender set aside another £2.4bn to cover future bad loans and slumped to a second-quarter loss. There was a particularly large jump in provisions for soured mortgage loans, which the bank blamed on an “additional reduction in house price forecasts” since its last update to investors in April. The bank reported a pre-tax loss of £676m in the second quarter, compared with a pre-tax profit of £1.3bn a year ago. Read more