The group’s interim management statement showed that despite a drop off in profit after tax, its underlying profit, which deducts one-off costs, remained relatively stable at £2.1bn in the three months to the end of March, down 6% from a year earlier.
Lloyds’ profits were hit by a £790m repurchase of high interest ‘ECN’ bonds from investors which the lender sought to buy back in order to cut its interest bill, according to the Telegraph. However, investors fought back against the move, leading to a legal battle although the lender eventually won.
The bank has also missed out on any profits from TSB, after Lloyds’ remaining stake was sold to Banco de Sabadell in June last year.
Lloyds has not reported gross mortgage lending figures but its statement noted that loans and advances to customers totalled £457bn, up marginally from £455bn in the final quarter of 2015.
The group’s chief executive Antonio Horta-Osorio (pictured), told The Telegraph that low interest rates and an uptick in buy-to-let activity has forced the firm to curb lending.
“As interest rates are being kept lower for longer we’ve decided, in terms of prudent risk attitude given the growth in buy-to-let and to preserve margins, to grow slightly less in mortgages,” he said.
“In relation to the targets of the plan we have been outperforming significantly in consumer finance and have been keeping up to the plan in SMEs.”
