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LONDON - Lloyds Bank PLC, part of the Lloyds Banking Group (LON:LLOY), reported a 26% decline in profit before tax for the first quarter of 2025 compared to the same period last year. The profit before tax for the quarter stood at £1,177 million, down from £1,587 million in the first quarter of 2024, primarily due to higher operating expenses and an increased impairment charge.
The bank’s total income for the quarter was £4,371 million, remaining relatively unchanged from the previous year’s figure of £4,385 million. Net interest income increased by 4% to £3,244 million, attributed to a higher margin and an increase in average interest-earning assets. However, other income saw a 10% decrease to £1,127 million, which the bank ascribed to negative market volatility and reduced income from fellow Lloyds Banking Group undertakings, despite improved performance in UK Motor Finance.
Operating expenses rose by 6% to £2,884 million, reflecting inflationary pressures, strategic investments, and business growth costs, partially mitigated by cost savings and continued cost discipline. The impairment charge for the quarter was £310 million, a significant rise from the £70 million reported in the first quarter of 2024. Lloyds Bank cited a resilient asset quality with the charge mainly driven by a higher charge in Commercial Banking and a £100 million central adjustment for downside risks related to US tariff policies.
On the balance sheet, total assets increased by 1% to £616,356 million as of March 31, 2025. Customer deposits grew by £4,780 million, with both retail and commercial banking contributing to the increase. The Group’s common equity tier 1 (CET1) capital ratio slightly decreased to 13.6% at the end of the first quarter from 13.7% at the end of 2024, while the total capital ratio remained stable at 19.9%.
Looking ahead, Lloyds Bank’s outlook includes modest GDP growth and a slight rise in the unemployment rate, with expectations for gradual cuts in the UK Bank Rate throughout 2025. The bank’s economic assumptions also take into account potential impacts from US tariff policies, which have been accounted for with a central adjustment in the impairment charge.
The information provided is based on a press release statement from Lloyds Bank PLC.
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