London Daily

Focus on the big picture.
Saturday, Feb 14, 2026

Britain's biggest lender takes bad loan charge ahead of 'mortgage shock'

Britain's biggest lender takes bad loan charge ahead of 'mortgage shock'

Higher interest rates provide a boost to the group's bottom line but it fears they could also push more customers towards default, resulting in a fresh provision on its balance sheet.

The boss of Lloyds Banking Group has told Sky News a "mortgage shock" is awaiting around 200,000 of its home loan customers.

In an interview with Ian King Live, Charlie Nunn said 10% of its mortgage customers were due to exit a fixed rate deal this year and it was actively speaking to many households about affordability given hikes to rates over the past year.

"Where we're really focused on as a bank is looking at those customers that are going to have an increase in their mortgage payments which is going to increase their interest they pay as a percentage of their income", he said.

"There's less than 1% of our customers that we think are going to have a mortgage interest shock like that and what we've been doing is quietly reaching out to them."

He was speaking hours after the group revealed a provision of £1.5bn last year - £500m of it in the final quarter - for bad loans ahead.

The group fears defaults could rise as a result of higher interest rates - mostly a consequence of Bank of England efforts to combat inflation - combining with the wider cost of living crisis to squeeze budgets further.

Lloyds reported a 12% increase in its bonus pool for 2022 despite pre-tax profits remaining flat on the previous year.

Earnings of £6.9bn for the 12 months matched the sum achieved in 2021, even though revenue had risen 14% to £18bn.

The 12% rise in the bonus pool to £446m, revealed separately in the bank's annual report, is above the peak rate of inflation seen over the year.

Charlie Nunn is the chief executive of Lloyds Banking Group

Mr Nunn took £1.33m of that sum, the document said, plus a long-term share plan award of 150% of his salary.

It took his total awards to £3.8m.

The bank, which incorporates Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows, also announced it would pay a 1.6p per share final dividend and a share buyback of up to £2bn.

It amounts to £3.6bn of shareholder returns.

The group said rising interest rates and additions to its loan book helped profits almost double over the final three months of 2022.

The latter rose by £6.3bn to £475bn over the year.

Mr Nunn told investors: "While the operating environment has changed significantly over the last year, the group has delivered a robust financial performance with strong income growth, continued franchise strength and strong capital generation, enabling increased capital returns for shareholders.

"We know that the current environment continues to be challenging for many people and have mobilised the organisation to further support our customers.

"Our purpose-driven strategy is more relevant now than ever before. We remain committed to helping Britain prosper and helping the country recover from the current economic uncertainties."

Shares fell back by 2% at the market opening.

John Moore, senior investment manager at RBC Brewin Dolphin, said: "Lloyds has finished off the major UK banks' results season with a performance that is 80% NatWest and 20% Barclays.

"Profits have been flat year-on-year, with bad loan provisions adding extra costs, among other moving parts.

"The bank has a history of prioritising its dividend, which is up 20% on last year, and acts as a good indicator of sentiment from management.

"Alongside the dividend increase is a £2bn share buyback programme, underpinned by enhanced guidance for the years ahead - all of which suggests a relatively positive outlook for Lloyds."

Newsletter

Related Articles

0:00
0:00
Close
Peter Mandelson Asked to Testify Before US Congress Over Jeffrey Epstein Links
Walmart's Earnings and UK Economic Data Highlight Upcoming Financial Trends
UK Green Party Considering Proposal to Legalize Heroin for an Inclusive Society
SpaceX's New Vision: Lunar City Takes Precedence Over Mars Colonization
OpenAI and DeepCent Superintelligence Race: Artificial General Intelligence and AI Agents as a National Security Arms Race
Document Suggests Prince Andrew Shared UK Briefing on Afghan Investment Opportunities with Jeffrey Epstein
We will protect them from the digital Wild West.’ Another country will ban social media for under-16s
McDonald's Shortens Breakfast Hours in Australia Due to Egg Shortage
Heineken announces cut of 6,000 jobs due to declining beer demand
Beijing Brands UK Hong Kong Visa Expansion ‘Despicable and Reprehensible’ After Jimmy Lai Sentencing
Tesco Chief Warns UK Is ‘Sleepwalking’ Toward a Joblessness Crisis
Trump’s ‘Act of Great Stupidity’ Comment on UK Chagos Deal Reverberates Through Diplomacy and Strategy
New U.S. filings say Jeffrey Epstein repaid Les Wexner one hundred million dollars after theft allegation
Commerce Secretary Howard Lutnick acknowledges 2012 visit to Jeffrey Epstein’s private island as lawmakers scrutinise past ties
Helsing and Stark Defence loitering-munition drones and Germany’s race to industrialise battlefield autonomy
UK orders deletion of Courtsdesk court-data archive, reigniting the fight over who controls public justice records
UK Police Review Fresh Claims Involving Prince Andrew as Senior Royals Respond to Epstein Files
Keir Starmer’s Premiership Faces Unprecedented Strain as Epstein Fallout Deepens
Starmer Vows to Stay in Office as UK Government Faces Turmoil After Epstein Fallout
China and UK Signal Tentative Reset with Commitment to Steadier, Professionally Managed Relations
UK Confirms Imminent Increase in ETA Fee to £20 as Entry Rules Tighten
UK Signals Possible Seizure of Russia-Linked ‘Shadow Fleet’ Tanker in Escalation of Sanctions Enforcement
Epstein Scandal Piles Unprecedented Pressure on UK Prime Minister Keir Starmer’s Leadership
UK’s ‘Most Romantic Village’ Celebrates Valentine’s Day and Explores the Festival’s Rich History
The Implications of Expanding Voting Rights to Non-EU Foreign Residents in France
Ghislaine Maxwell to Testify Before US Congress on February 9
Al.com Acquired by Crypto.com Founder for $70 Million
Apple iPhone Lockdown Mode blocks FBI data access in journalist device seizure
Belgium: Man Charged with Rape After Faking Payment to Sex Worker
KPMG Urges Auditor to Relay AI Cost Savings
US and Iran to Begin Nuclear Talks in Oman
Winklevoss-Led Gemini to Slash a Quarter of Jobs and Exit European and Australian Markets
Canada Opens First Consulate in Greenland Amid Rising Geopolitical Tensions
China unveils plans for a 'Death Star' capable of launching missile strikes from space
NASA allows astronauts to take smartphones on upcoming missions to capture special moments.
Trump administration to launch TrumpRx.gov for direct drug purchases
Investigation Launched at Winter Olympics Over Ski Jumpers Injecting Hyaluronic Acid
U.S. State Department Issues Urgent Travel Warning for Citizens to Leave Iran Immediately
Wall Street Erases All Gains of 2026; Bitcoin Plummets 14% to $63,000
Epstein Case Documents Reignite Global Scrutiny of Political and Business Elites
Eighty-one-year-old man in the United States fatally shoots Uber driver after scam threat
UK Royal Family Faces Intensifying Strain as Epstein-Linked Revelations Rock the Institution
Political Censorship: French Prosecutors Raid Musk’s X Offices in Paris
AI Invented “Hot Springs” — Tourists Arrived and Were Shocked
Tech Mega-Donors Power Trump-Aligned Fundraising Surge to $429 Million Ahead of 2026 Midterms
UK Pharma Watchdog Rules Sanofi Breached Industry Code With RSV Vaccine Claims Against Pfizer
Melania Documentary Opens Modestly in UK with Mixed Global Box Office Performance
Starmer Arrives in Shanghai to Promote British Trade and Investment
Harry Styles, Anthony Joshua and Premier League Stars Among UK’s Top Taxpayers
New Epstein Files Include Images of Former Prince Andrew Kneeling Over Unidentified Woman
×