Lloyds sets aside a further 1.4 billion pounds for customer compensation as it reports H1 results, but there's an improved earnings picture from France's BNP, and BBVA and its Spanish peer Caixabank surprise to the upside with a bumper rise in profits. Kirsty Basset reports.
Mixed results for Europe's banks. Lloyds saw first half profits reach 1.2 billion pounds, up 38 per cent from a year ago. But below analysts' forecasts - after it was forced to set aside a further 1.4 billion pounds to compensate customers who were mis-sold loan insurance, in what - at over 13 billion pounds - is Britain's most expensive consumer finance scandal. Lloyds described the extra charge as 'disappointing.' There was a stark turnaround for French bank BNP Paribas compared to a year ago. It saw second quarter revenue rise almost 16 per cent with a profit of almost 2.6 billion euros - boosted by a strong dollar and recent acquisitions. A significant amount of their profit came from investment banking. Panmure Gordon's David Buik. (SOUNDBITE) (English) DAVID BUIK, MARKET COMMENTATOR, PANMURE GORDON, SAYING: "I think BNP Paribas are very smart in not just saying Goldman Sachs, Morgan Stanley, UBS, Deutsche Bank fill your boots. Have some of it, and they've done it and they've done it well." Meanwhile in Spain, bank profits have been improving as the economy picks up there. (SOUNDBITE) (English) DAVID BUIK, MARKET COMMENTATOR, PANMURE GORDON, SAYING: "Spain has come from a very low base. And when you've had a seriously trashed banking system, there is every reason to believe there can be a recovery there." Caixabank has seen first half net profits jump 75 per cent to 708 million euros. While acquisitions helped BBVA see its first half profits more than double.