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Lloyds results reveal £2bn of debt in forbearance

Lloyds Banking Group is holding on to a pipeline of £2bn of retail loans and advances which are in forbearance schemes, according to its annual results for 2016.

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This pipeline of what the bank called “retail debt” includes current account overdrafts and mortgages.

 

The results also paint a picture of what the bank has written off in other areas of its consumer lending. The announcement states that Lloyds had written off £282m of consumer finance debt in 2016 compared to £235m in 2015. Consumer finance includes motor finance, credit cards and unsecured personal loans.

 

Elsewhere in the report the results show the value of impaired loans the bank is currently holding which may or may not be written off in future. It shows that Lloyds has:

 

-£307m of impaired credit card debt;

-£277m of impaired personal loans;

-£120m of impaired UK motor finance loans.

 

Lloyds set its impairment provisions for consumer finance, which includes all of the above products, at £396m at the end of 2016.

 

Across the group, pre-tax profit increased from £1.6bn in 2015 to £4.2bn in 2016, though António Horta-Osório, group chief executive of Lloyds, was keen to emphasise the bank’s progress in digital banking, as much its financial performance.

 

He said: “We operate the UK’s largest branch network and the largest digital bank with over 12.5 million active online users.

 

“Customer migration to digital channels continues at pace with more than 60 percent of our simple customer needs now met online and digital is now the number one channel for new loans and credit cards.”

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