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Lloyds Banking Group posts £1.9 billion Q3 pretax profit despite Brexit headwinds

Lloyds Banking Group on Wednesday reported third-quarter profits largely unchanged from a year ago, confounding initial expectations of a sharp squeeze on earnings caused by Britain's surprise vote to quit the European Union.

Underlying pretax profits were 1.9 billion pounds ($2.31 billion), slightly under the 1.97 billion pounds booked in the corresponding period a year ago.

Total income for the quarter was 4.3 billion pounds, broadly in line with Q3 2015.

Justin Tallis | AFP | Getty Images

Britain's largest retail bank also booked a fresh 1 billion pound charge to compensate customers mis-sold loan insurance after the Financial Conduct Authority pushed back the claims deadline by a year to mid-2019.

"The outlook for the UK economy remains uncertain, however the strength of the recovery in recent years means the UK is well positioned," the bank said in a statement.

Lloyds also reported a 740 million pound deficit in its pension fund, which has been hit by falling bond yields in recent months.

Rescued in a 20.5 billion pound taxpayer bail-out during the financial crisis, Lloyds is the first major British bank to report results that fully capture the period after the referendum results.

Chief Executive Officer Antonio Horta-Osório is searching for ways to prop up Lloyds' dividend and profits against a more testing economic enviornment and the effects of lower-for-longer interest rates caused by the vote to leave the EU.

Since June's referendum, shares in Lloyds <LLOY.L> have fallen by about a quarter, partly reflecting their heavy exposure to any downturn in the British economy.

Lloyds said total loans and advances to customers fell 1 billion pounds to 452 billion pounds compared to three months earlier.

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