Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Lloyds Banking Group’s first-quarter profits fell to £1.5bn as it set aside more money than expected for bad loans in anticipation of the economic impact from US tariffs.
The high-street bank said on Thursday that pre-tax profits for the first three months of the year fell 7 per cent from the same period in 2024, in line with analyst expectations. Revenues rose 4 per cent year on year to £4.4bn.
The bank set aside £309mn for bad loans, higher than what analysts expected, as it added a £35mn provision to account for changes in the economic outlook linked to US President Donald Trump’s tariffs.
Lloyds, seen as a bellwether for the UK economy, indicated that overall credit quality remained resilient, with “stable and benign credit performance in the first quarter”.
Net interest margin — the difference between the interest it charges on loans and the rate it pays on customer deposits — rose to 3.03 per cent, from 2.97 per cent in the previous quarter.
The boost was driven by so-called structural hedging, which the bank uses to smooth the impact of falling rates on its margins.
