It reports higher pre-tax profit and net income
The Lloyds Banking Group reported a strong financial performance in the third quarter of 2023, with pre-tax profits more than triple those of last year and its year-to-date figure also up by 54%.
The group’s statutory profit before tax in the three months to the end of September soared to £1.86 billion from £576 million, while net income also increased to £4.51 billion, compared with the £4.48 billion recorded in the previous year.
Lloyds’ impairment charge for potential bad loans also fell by 72% to £187 million from £668 million last year.
However, its net interest margin of 3.08% in the third quarter was down six basis points in the quarter amid mortgage and deposit pricing headwinds while operating costs of £6.7 billion were up by 5%.
We've published our 2023 Q3 #LBGResults, demonstrating a robust financial performance, with a strong income trajectory and capital generation.
— Lloyds Banking Group (@LBGplc) October 25, 2023
For a full breakdown, visit: https://t.co/K6AooAfPRu#LLOY $LYG pic.twitter.com/rdUN1026KM
Lloyds, the UK’s biggest mortgage lender, said it remains focused on supporting customers and helping them navigate the uncertain economic environment.
“The group continues to perform well,” Charlie Nunn (pictured), chief executive at the Lloyds Banking Group, commented on the bank’s Q3 2023 financial results. “Robust financial performance and strong capital generation in the first nine months of the year was driven by net income growth, cost discipline and resilient asset quality. This performance allows us to reaffirm our 2023 guidance.
“As we set out in the first of our four strategic seminars earlier this month, we are successfully executing against our strategic priorities. This supports progress towards our ambition to enable higher, more sustainable returns. Together, it will better position us to deliver for all of our stakeholders as we continue to help Britain prosper.”
John Choong, equity analyst at InvestingReviews.co.uk, meanwhile, commented that Lloyds’ latest results should come as a relief to investors as higher income from the bank’s structural hedges returned in Q3 to offset lower loan demand due to higher interest rates.
“The encouraging profit figure was also due to the lender’s more affluent customer base and a better-than-expected economic outlook, which saw impairment charges come in significantly lower than last year and in Q2,” he added. “Another major positive was that contracting loan growth also looks to have bottomed out as customer loans in Q3 grew from the quarter before.
“With bank rate expected to peak soon, deposit outflows have stabilised as well. Combined, these factors should help boost Lloyds Banking Group’s bottom line, which is why it’s no surprise to see the board reiterate their outlook for the year.”
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