(Reuters) -Lloyds Banking Group reported a near 7% drop in first-quarter profit on Thursday, hurt by higher costs, and said it had set aside 100 million pounds ($132.9 million) for tariff-related
Lloyds Q1 Profit Declines, Sets Aside $133M for Tariff Impact
By Shashwat Awasthi
(Reuters) -Lloyds Banking Group's profits fell 7% in the first-quarter, hit by higher costs and impairment charges, and it set aside 100 million pounds ($133 million) for the impact of trade tariffs imposed by U.S. President Donald Trump.
The broad economic outlook has become much more unpredictable as a result of the tariffs, prompting other major banks to warn about the fallout, including in terms of credit quality and loan demand.
Lloyds, Britain's biggest mortgage lender, took an impairment charge of 309 million pounds, which included 35 million pounds for "changes in economic outlook".
"Initial non-UK tariffs announced in the first few days of April and the immediate market response were larger than expected," Lloyds said in a statement.
The bank's pre-tax profit was 1.52 billion pounds for the three months ended March 31, down from 1.63 billion pounds a year earlier, just shy of a company-compiled consensus estimate of 1.53 billion pounds.
The FTSE 100 company's shares fell 2.4% to 71.5 pence in early trading and were 1% lower by 0745 GMT.
LENDING GROWTH
Lloyds, seen as a bellwether for the UK economy, said UK home loans rose by 4.8 billion pounds in the first quarter compared with the first quarter of last year.
CFO William Chalmers credited the growth to lower interest rates and loans completed before a tax break for home buyers came to an end in April.
"It is likely that in the remainder of this year we will see some continued impact of mortgage completion getting brought forward... I'd be surprised if mortgage growth is quite as strong, certainly going into Q2 as it was in Q1," Chalmers said.
Lloyds confirmed its financial forecast for 2025 and 2026, and said it did not record further charges to cover the costs of a potential customer redress scheme linked to the sector-wide review into the potential mis-selling of car loans.
It has so far set aside 1.15 billion pounds for redresses.
($1 = 0.7526 pounds)
(Reporting by Shashwat Awasthi in Bengaluru and Sinead Cruise in London; Editing by Sonia Cheema, Emelia Sithole-Matarise and Jane Merriman)
