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Lloyds Banks Posts Record Profits Amidst Car Finance Scandal
30 Jan
Summary
- Lloyds reported £6.7 billion in profits for 2025.
- An £800 million charge was taken for the car finance scandal.
- The bank announced a £1.75 billion share buyback and dividend increase.
In 2025, Lloyds Bank reported a significant financial achievement, posting profits of £6.7 billion, an increase from £6 billion in the previous year. This performance occurred despite the bank setting aside an £800 million provision to address the costs associated with the car finance scandal, bringing the total compensation bill to £1.95 billion.
Lloyds also allocated £795 million to cover potential loan defaults. Nevertheless, the bank revealed plans for a substantial share buyback program, potentially reaching £1.75 billion, and a 15% hike in its dividend to 3.65p per share. The bank's stock saw a 0.9% rise on the day, contributing to a 68% gain over the past year.
Responding to calls for a windfall tax, bank executives cautioned that such a measure could negatively impact lending capacities for households and businesses. Lloyds stated that in 2023, it earned £2.6 billion from interest on funds held at the Bank of England, though it anticipates this figure to decline.
