Lloyds profits up 23 per cent

Lloyds Banking Group’s pre-tax profits have jumped 23 per cent to hit £1.6 billion for the quarter, latest results show.

The group, which includes Bank of Scotland, said it made a “strong start” to 2018, with profits for the first three months of the year jumping by nearly a quarter.

For the three months to the end of March, the bank reported net income of £4,3 billion, up 4 per cent year on year, as Lloyds sounded a bullish note on the prospects for the UK economy moving forward in 2018.

However, it said it had put aside another £90 million in costs for payment protection insurance (PPI) mis-selling claims, taking its total bill to £18.8 billion.

And overall bad loans rose to £258 million during the first three months of 2018, compared with £127 million at the same time last year.

Lloyds says the results have also been adjusted to reflect strategic investments including subsidiary Scottish Widows’ acquisition of Zurich’s workplace pensions business.

Chief executive António Horta-Osório said: “The UK economy continues to be resilient, benefiting from low unemployment and continued GDP growth. Asset quality remains strong with no deterioration seen across the portfolio. We expect the economy to continue to perform along these lines during 2018.”

The government sold its last shares in Lloyds in May 2017, eight years after pumping in £20 billion to save it, and Mr Horta-Osório said the strength of the group’s altest results had led to the start of a £1bn share buyback programme last month to return money to stakeholders.

Unveiling a new three year strategy in February, Lloyds said it would boost its financial planning and retirement open book assets by more than £50bn by 2020 and target more than one million new pension customers.