You are here: Home - News -

Lloyds Bank profits jump despite loan impairment increase

  • 25/04/2018
  • 0
Lloyds Bank profits jump despite loan impairment increase
Lloyds Banking Group’s reported a solid start to 2018 with a surge in profits over the first three months of the year, although loan impairments at the lender doubled.


The bank’s profit before tax jumped 23% to £1.6bn compared to the same period in 2017, and underlying profit increased by 6% to £2bn.

A fall in costs relating to Payment Protection Insurance (PPI) helped lift the bank’s results, as did the income from the acquisition of the MBNA credit card book.


Adverse credit signals


However, the amount of bad loans at the lender jumped to £258m in the first quarter, compared with £127m in the same period last year.

The bank declined to detail mortgage lending growth or figures, but reported an open mortgage book of £267bn, which it said remained in line with the year end of 2017.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Lloyds has made a good start to 2018, thanks to a growing top line and lower PPI costs.

“Rising interest rates are positive for the banking sector, and Lloyds is also benefitting from the purchase of the MBNA credit card portfolio, as this kind of debt yields significantly more for banks than mortgage borrowing, albeit with greater risk.

“That said, bad loans remain well contained at Lloyds, as unemployment and interest rates are near historical lows, which means most people are able to service their debts adequately.”


Solid outlook


António Horta-Osório, Lloyds chief executive, appeared upbeat about the prospects for 2018.

He said: “The UK economy continues to be resilient, benefiting from low unemployment and continued GDP growth.

“Asset quality remains strong with no deterioration seen across the portfolio.

“We expect the economy to continue to perform along these lines during 2018.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Read previous post:
‘Win a £700k house’ competition slammed over misleading prize by ASA

The Advertising Standards Authority (ASA) has upheld a complaint against a property lottery website, after the winning entrant was given...