Lloyds Bank’s profits declined by one-third as a result of reduced interest rates and increased competition in the mortgage market.
Lloyds reported a pre-tax profit of £1.6 billion for the period from January to March, slightly surpassing analyst expectations but showing a 28% decrease from the previous year.
The bank’s underlying net interest income dropped 10% to £3.2 billion, with a key profitability measure decreasing from 3.22% last year to 2.95%, though the decline was less than anticipated by the City.
Increased mortgage refinancing activity resulted in more turnover in Lloyds’ mortgage portfolio.
Chief Executive Charlie Nunn remarked, “The group is continuing to perform according to expectations in the first quarter of 2024, with solid net income, cost control, and strong asset quality. This performance bolsters our confidence in our strategic goals and the guidance for 2024 and 2026.”
Lloyds also confirmed that it had not taken additional charges concerning the potential impact of motor finance regulations by the Financial Conduct Authority.
In February, the bank allocated a £450 million provision for potential expenses related to a redress scheme.
Lloyds is the first among the major UK retail banks to disclose earnings for the first quarter. Barclays and Natwest are set to announce their results tomorrow and Friday, respectively, followed by HSBC next week.
