- Lloyds Bank’s pre-tax earnings drop 28% in Q1
- Business expenses, lower net interest income cited as causes
- CEO maintains confidence, solid net income despite decline
According to the largest mortgage lender in Britain, pre-tax earnings decreased by 28% in the first quarter of 2024. Nevertheless, it maintained that the decline was consistent with anticipated outcomes.
Profits at Lloyds Banking Group have decreased since the company posted record-breaking results the previous year.
The largest mortgage lender in the United Kingdom, whose subsidiaries consist of Halifax and Bank of Scotland, reported £1.6 billion in pre-tax profits for the first quarter of 2024.
Comparative to the £2.3 billion reported for the same period last year, the current amount is 28% lower.
The banking behemoth, on the other hand, stated that the results met its expectations.
For the quarter, analysts had projected profits of £1.7 billion.
Higher business expenses, including a new sector-wide levy imposed by the Bank of England, and a decline in net interest income (the difference between what the company earns from loans and pays out on deposits) were cited as the causes by Lloyds.
The group has emerged as the initial prominent bank in the United Kingdom to disclose its financial performance for the initial quarter of the current year.
The company’s stock fell 2% when markets reopened on Wednesday morning, after the release of the financial results.
Lloyds previously disclosed an unprecedented annual pre-tax profit of £7.5 billion in 2023.
The lender attributed the increase to higher interest rates, which were implemented by the Bank of England to combat inflation.
The gradual deceleration of price increases in numerous countries over the past few months has increased anticipations that central banks will implement limited rate reductions later this year.
Charlie Nunn, chief executive officer, stated, “The group’s performance in the first quarter of 2024 remains consistent with expectations, as evidenced by its solid net income, cost discipline, and high-quality assets.”
Our performance instills additional assurance in regard to our strategic objectives and the guidance for 2024 and 2026.
Furthermore, the bank continues to “support customers” and “help Britain prosper,” he added.
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Lloyds has also revised its projections for the forthcoming year in light of the improving economic outlook in the United Kingdom.
It now forecasts that house prices in the United Kingdom will increase by 1.5% this year, as opposed to its previous belief that they would decline.
Lloyds declared its intention to reduce its workforce by approximately 1,600 employees throughout its branch network in January, as the organization transitions its operations to online banking.
In addition, the organization is eliminating its fleet of mobile banking vehicles as an integral component of the strategies.
