Lloyds pre-tax profit hits £1.6bn

The bank said it has had a strong start to the year with no change to the financial targets for 2018.

The results show that Lloyds impairment costs increased by 103 percent from £127m in the first quarter of 2017, to £258m for the same period this year.

The bank’s operating costs reached £2m for the first quarter of 2018, a two percent increase compared to the same period in 2017. Lloyds said this reflected the integration of MBNA.

PPI costs decreased from £350m to £90m - a total drop of 74 percent. The bank said the latest figure comprises higher costs relating to completing a requirement under the Plevin ruling to proactively contact customers who have previously had their complaints defended.

Lloyds said loans and advances to customers were adjusted on adoption of IFRS 9, resulting in a £11.5bn reduction to £444bn, from December 2017 to January 2018, primarily due to the reclassification of certain assets.

It said that after this adjustment, loans and advances to customers increased in the first quarter of  2018 to £445bn with continued growth in targeted segments, including £300m in SME and £300m in motor finance, while the open mortgage book of £267bn remained in line with the end of 2017.

António Horta-Osório, group chief executive of Lloyds, said: “These results continue to demonstrate the strength of our business model. In March, following our 2017 results and dividends announcement, we commenced our share buyback programme of up to £1bn.

“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.”