Lloyds’ UK motor finance portfolio saw 19% growth to £13.7bn in 2017, but impairment charges in the segment rose substantially, up 48% to £111m.
Black Horse accounts for the majority of Lloyd’s motor finance business, but the group did not break down the results by brand.
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Lloyds’ wider retail banking division saw net income up 5% to £9.9bn in 2017, partly thanks to growth in Lex Autolease.
Growth in revenues for the division was partly offset by an increase in impairment costs, up 10% to £717m, and a £400m rise in operating costs, to £4.8bn.
Operating lease depreciation rose sustantially, up 22% to £946m. Lloyds attributed this to fleet growth and increasingly conservative residual values.
Underlying profits for the retail division ultimately grew to £4.4bn for the year, up 9%.
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By GlobalData“In terms of consumer finance … our intention is to grow reasonably in line with the market over the next three years,” said group chief executive António Horta-Osório.
“It is an area where we are still underrepresented, excluding credit cards … and therefore my best idea is to grow in line with the market,” he added.
Across the wider Lloyds banking group, net income was £17bn, up 5% from 2016. Operating lease depreciation on all leased assets grew 18% to £1bn. Underlying profits grew 8% to £8.5bn.
The 2017 results were the first full-year results to be published since the UK government, which had bailed out Lloyds after the financial crisis, sold its last remaining stake in the bank.
Horta-Osório said: “2017 has been a landmark year in which the Group has made significant strategic progress and returned to full private ownership. This is due to the hard work of all our people and I thank them for it.”
“We have identified four strategic priorities focused on the financial needs and behaviours of the customer of the future: further enhancing our leading customer experience; further digitising the group; maximising group capabilities; and
transforming ways of working.
“We will invest more than £3 billion in these strategic initiatives through the plan period that will drive our transformation into a digitised, simple, low risk, customer focused UK financial services provider.”
