UK’s Lloyds bank returns to profit on housing market rebound

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LONDON (AP) — British’s Lloyds Banking Group returned to profit in the third quarter of the year as it benefited from a rebound in the housing market after the coronavirus lockdown of the spring was eased.

However, the bank warned Thursday that the outlook remains “highly uncertain” following the resurgence of the coronavirus this fall and a lack of clarity over Britain’s post-Brexit trade discussions with the European Union.

During the third quarter, the company said that activity levels picked up after contracting in the first six months during the height of the early stage of the pandemic, particularly mortgage applications and consumer spending.

The British housing market saw activity levels bounce back strongly during the summer after the government announced a temporary tax reprieve on house purchases.

During the three months to the end of September, Lloyds reported a net profit of 688 million pounds ($895 million) against last year’s equivalent loss of 238 million pounds.

Lloyds was able to outperform market expectations because its one-off charges were lower than anticipated. It took a 301 million-pound hit, more than 400 million pounds less than predicted. The bank now forecasts that impairments for the whole of 2020 will be in the lower end of the 4.5-5.5 billion-pound range it had predicted earlier this year.

“Although our performance has clearly been impacted by the pandemic and the associated challenging economic environment, I am pleased that we are now seeing an encouraging business recovery and, with impairments significantly lower, a return to profitability in the third quarter,” said Chief Executive Antonio Horta-Osorio.

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