25th Apr 2018 07:55
LONDON (Alliance News) - Lloyds Banking Group PLC on Wednesday reported a strong rise in profit for the first quarter of 2018, with its common equity tier 1 ratio strengthening and its banking net interest margin climbing.
Total income rose 4% in the three months to March-end to GBP4.58 billion, while statutory pretax profit rose 23% to GBP1.60 billion from GBP1.30 billion.
Net interest income came in at GBP3.17 billion, up 8% from GBP2.93 billion a year before. "Other" income was GBP1.41 billion, down 5% from GBP1.48 billion.
The decrease reflected higher weather related insurance claims, Lloyds said, along with lower bulk annuity business, transaction flows in Commercial Banking and changes to overdraft charging which took effect in November, partly offset by continued growth in the Lex Autolease business.
Operating costs fell 2% to GBP2.01 billion from GBP1.97 billion, with impairments rising to GBP258 million from GBP127 million.
The lender took a GBP90 million payment protection insurance provision in the period, down from last year's GBP350 million. The provision comprised the increased costs associated with the requirement under the Plevin ruling to proactively contact customers who have previously had their complaints defended.
Return on tangible equity for the period came in at 12.3%, compared to 8.8% a year earlier, while Lloyd's CET1 ratio strengthened to 14.4% before dividend accrual compared to 13.9% at January 1.
The company's banking net interest margin rose to 2.93% from 2.80% a year before, "driven by the benefit from MBNA and lower deposit and wholesale funding costs, more than offsetting continued asset pricing pressure."
The lender said it has made a strong start to the year and has retained its financial targets for 2018.
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