Lloyds Bank reports 33% rise in profit, warns of Iran war impact
First Quarter Financial Performance and Outlook
By Lawrence White
Profit Growth and Analyst Expectations
LONDON, April 29 (Reuters) - Lloyds Banking Group on Wednesday reported its first quarter profit rose 33%, beating analysts' forecasts, as increased lending income offset a 151 million pound ($204 million) charge it took to reflect a deterioration in the economic outlook due to the Iran conflict.
The British lender reported statutory profit before tax for January-March of 2 billion pounds, up from 1.52 billion pounds in the same period a year ago and above the average analyst estimate of 1.84 billion pounds.
Impact of Middle East Conflict
Lloyds said the war in the Middle East could hurt Britain's economy as well as global growth, and trigger a rise in the unemployment rate, causing the lender to downgrade some of the scenarios that it uses to calculate future potential losses.
Performance Targets and Strategic Outlook
The bank nonetheless said it was on track to meet its performance targets for the year, after in January it lifted its key profitability target to make a return on tangible equity greater than 16% in 2026, having forecast just 12% for 2025.
Motor Finance Scandal Exposure
The bank's recent financial results have been marred by its exposure to the UK motor finance scandal, in which customers were sometimes not told about hidden commissions. Lloyds said it had not made any fresh provision against consumer redress in the first quarter.
Future Strategy Announcement
Lloyds CEO Charlie Nunn said the bank would present its new strategy alongside its half-year results in July.
Additional Information
($1 = 0.7405 pounds)
(Reporting by Lawrence White; Editing by Tommy Reggiori Wilkes)
