Lloyds, Europe's second biggest bank by market value, has reports weaker than expected third-quarter results. The results came as its rival Barclays said it would pay incoming chief executive James ''Jes'' Staley up to 8.24 million pounds. Ciara Lee reports.
It's Europe's second biggest bank by market value but it's in the spotlight for the wrong reasons. Weaker than expected third-quarter results saw underlying pre-tax profits fall to 2 billion pounds at Lloyds Banking Group, down from 2.2 billion for the same period last year. Total income declined by 4 percent. Lloyds has been forced to set aside a further 500 million pounds to compensate customers mis-sold loan insurance. The new charge has brought the bank's total PPI bill to nearly 14 billion pounds - more than double that of any other bank. Shares were down over four and a half percent in early trade. But CMC Markets' Jasper Lawler says successes may be being overlooked. (SOUNDBITE) (English) MARKET ANALYST, CMC MARKETS, JASPER LAWLER, SAYING: "I think what is probably not getting enough attention is the rise in pre-tax profits. And just the projected profits for the year stands to be around 8 billion. That's way up on the previous year." Another lender also facing scrutiny - Barclays. It's to pay incoming chief executive James or "Jes" Staley up to 8.2 million pounds a year. Talk of big pay comes at a sensitive time for the bank. It's halfway through a three-year plan to cut 19,000 jobs. . (SOUNDBITE) (English) MARKET ANALYST, CMC MARKETS, JASPER LAWLER, SAYING: "Certainly the pay is large, but he is in charge of a large bank. I think the problem with pay is when it is unjustified. If results deteriorate, yet the size of the pay expands, obviously the incentives are messed up there." And those incentives - or challenges - are considerable. Staley must improve the bank's reputation after a series of scandals, cut its costs and improve its profitability.