Lloyds profit down following record year

Lloyds Banking Group has reported a 28% drop in first quarter profit, but said the figure was in line with expectations.

The group — which owns Lloyds Bank, Halifax and Bank of Scotland — posted pre-tax profit of £1.6bn for January to March 2024, down from £2.3bn in the same period last year. It attributed the decrease to lower net interest income and higher operating expenses, partly offset by a lower impairment charge.

Net income of £4.2bn was down 9% year-on-year but was broadly in line with the fourth quarter of 2023.

Chief executive Charlie Nunn said: “The group is continuing to deliver in line with expectations in the first quarter of 2024, with solid net income, cost discipline and strong asset quality.

“Our performance provides us with further confidence around our strategic ambitions and 2024 and 2026 guidance.”

In 2023, Lloyds’ pre-tax profit for the full year jumped to a record £7.5bn, up 57% on 2022, boosted by higher interest rates.

With inflation continuing to come down, the Bank of England is expected to cut the base rate later this year.

Over the course of 2024, Lloyds expects the central bank to make three reductions of 0.25 percentage points. This would take rates from 5.25% to 4.5%.