Lloyds Banking Group has put £668m aside to protect against potential defaults on loans and mortgages as it warned of the “the deterioration of the macroeconomic outlook”.
The UK’s largest mortgage lender saw profits drop by more than 25% in the three months to September.
However, the high street giant reported a £1.8bn growth in its open mortgage book in the quarter.
It also reported a 19% rise in net interest income, the difference between interest earned on loans and paid out on savings, to £3.4bn.
The bank is predicting that the UK economy could shrink by 1% next year while it thinks house prices could drop by anywhere from 8% to 18%.
Lloyds Banking Group chief executive Charlie Nunn said: “The current environment is concerning for many people, and we are committed to maintaining support for our customers.”
