Lloyds profit comes in ahead of City forecasts

Lloyds Banking Group has reported a better-than-expected set of third-quarter results as the lender continues a strong run of form.

The bank saw a 7% fall in profits to £1.82 billion in the three months to September 30 after it was hit by increased restructuring costs.

However, the figure was above consensus estimates of £1.7 billion and total income for the quarter came to £4.69 billion, an increase of 1%.

In addition, the bank’s net interest margin – the difference between the interest received from borrowers and the amount paid out on deposits – held steady at 2.93%.

Lloyds boss Antonio Horta-Osorio said: “These results further demonstrate the strength of our business model and the benefits of our low-risk, customer-focused approach.

“As planned, our strategic investment has accelerated and is already delivering real benefits to customers, whilst operating costs continue to reduce.”

Lloyds booked £235 million in restructuring costs to cover the likes of redundancy payments to workers as it pushes ahead with a three-year strategy which will see it focus on digital banking.

The bank has been undergoing an overhaul of its workforce and branch network, having announced hundreds of job cuts and branch closures over the past 12 months.

IoD Convention
Lloyds Banking Group chief executive Antonio Horta-Osorio (Jonathan Brady/PA)

The group also announced the departure of finance chief George Culmer, who will retire from the company in 2019.

The results build on a strong run of form for Lloyds, which was fully returned to private hands last year, nearly nine years after the Government bailed it out at the height of the financial crisis.

At the peak, Lloyds was 43% owned by the state after its bailout during the banking crisis when taxpayers were forced to inject £20.3 billion into rescuing the bank.

The group has been dogged by PPI claims, having paid out more than £18 billion to date to affected customers.

However, Lloyds took no additional charges in the quarter.

PPI claims have ramped up following a Financial Conduct Authority advertising campaign featuring Arnold Schwarzenegger as part of an effort to encourage people to come forward before an August 2019 deadline for final claims.

Earlier this week, Lloyds and investment giant Schroders confirmed they are joining forces to create a new wealth management venture.