Lloyds Banking Group reported full-year profit below expectations on Thursday, weighed down by money it set aside for potential consumer redress in relation to a motor finance probe.

Lloyds Banking Group (NYSE:LYG) shares climbed 5.6% in Thursday morning trading in the U.S. after announcing a £1.7B ($2.14B) share buyback program along with a 15% dividend hike. Still, Q4 2024 earnings came in worse than expected as more capital was set aside for potential costs it will incur for a motor finance investigation.

Lloyds Banking Group Plc reported earnings that missed expectations in the fourth quarter as the lender set aside an additional £700 million for possible costs it will face for a regulatory probe into its motor finance business.

Lloyds Banking Group has nearly tripled the amount it is setting aside to cover the car finance mis-selling scandal to £1.2bn, knocking its profits for the year. It is putting aside an extra £700m to cover potential compensation payments, on top of £450m earmarked earlier.

The lender took a further provision in the fourth quarter for a potential hit linked to its motor finance business, leading its pretax profit to miss expectations.