Lloyds Banking Group has reported pre-tax profits of £1.64bn for 2015, 7% lower than the figure for 2014.
The bank said it had made PPI provision of £4.0 billion including an additional £2.1 billion in the fourth quarter.
Lloyds said it remains the largest lender to first-time buyers, providing one in four first-time buyer mortgages in 2015.
“We have taken the conscious decision, however, to balance margin considerations with volume growth in the mortgage business, growing our open book by around 1% versus a market that grew by around 2.5%,” said Antonio Horta-Osorio, the bank’s chief executive.
“We believe this is the right approach as the leader in what is, at the moment, a low growth market where growth is predominantly coming from buy-to-let.”
Lloyds also confirmed a bonus of £850,000 for Horta-Osorio.