Lloyds Banking Group's pre-tax profits almost doubled to £2.3bn in the third quarter as high interest rates continued to drive bumper earnings that made lenders the target of a tax increase in Wednesday's Budget. The UK's biggest high street bank generated £5.1bn in revenues in the three months to September, up from £4.6bn a year earlier, when it reported £1.2bn in pre-tax profits.
However, those results were blighted by an £800mn charge over the motor finance mis-selling scandal, to which Lloyds has not added. The bank was buoyed by strong performance in its corporate and institutional banking division and its private bank, although overall results were in line with analysts' expectations. Lloyds' shares, down roughly 3 per cent in morning trading in London, have more than doubled under chief executive Charlie Nunn, who has boosted profitability since taking the role in 2021.
Chancellor John Healey used his maiden Budget to announce a temporary doubling to 6 per cent of the surcharge paid by banks on UK profits above £100mn. The increase was smaller than the 8 per cent most banks had expected. Lloyds chief financial officer William Chalmers said the bank recognised the "challenging" circumstances facing the chancellor, but stressed the importance of international competitiveness and said the "additional taxes are unhelpful" to Prime Minister Andy Burnham's growth commitments.
Healey welcomed the Bank of England's plans to ease capital rules for UK banks and urged faster delivery. Chalmers argued the measures to date "have not amounted to much". Meanwhile, Nunn has sought to diversify income toward businesses less dependent on interest rates, including wealth management and insurance, and has pledged to use AI and tokenisation to cut the time it takes to buy a house "from weeks to days".
Source: Financial Times Companies · Summarized by HeadlinesBriefing