Lloyds Banking Group sees profits hit £2bn following economic rebound

Lloyds Banking Group has reported better than expected third quarter profits as Britain's economy rebounded from pandemic lockdowns.

Friday, 29th October 2021, 3:55 pm
Updated Friday, 29th October 2021, 3:56 pm
Lloyds and Halifax Bank

Britain' s biggest mortgage lender, which includes Lloyds, Halifax and Bank of Scotland, said pre-tax profits doubled over the quarter.

The banking giant posted pre-tax profits of £2bn in the three months to September 30, up from £1bn in the same quarter in 2020. This was higher than analysts' forecasts of £1.3bn.

The increase came after the bank released more cash held aside during the pandemic, including £84m in the quarter, meaning that £740m of the £1.2bn held during the Covid-19 crisis has now been added back to the balance sheet.

Over the first nine months of the year, this equates to pre-tax profits of £5.9bn.

It also enjoyed strong growth in mortgage lending, which was up £2.7bnn in the quarter. Deposits also rose.

Chief Financial Officer William Chalmers said: "In the first nine months of 2021 we exceeded our full-year target for lending to first-time buyers, having delivered £12.8 billion of lending against a target of £10 billion. This meant we have supported 62,000 first-time buyers to purchase homes so far this year.

"We are also expanding the availability of affordable and quality homes by increasing our funding to the Housing Growth Partnership.

"We continue to help businesses grow, adapt and recover. We have supported over 70,000 businesses to start-up, and helped more than 130,000 boost their digital capabilities. We also generated £5 billion in net new open book assets under administration in Insurance and Wealth.

"In addition, we are delivering an improved merchant services proposition for our commercial clients, which has resulted in 12% growth in new clients so far this year.

"We continue to modernise our technology architecture and continue to develop our cloud capabilities.

"Our strategy in 2021 of Helping Britain Recover remains unchanged. Our solid financial performance, strong progress against our strategic priorities and continued business momentum position us well moving forward.

"Our strategy has proved to be incredibly resilient, and this has been vital to supporting our customers and communities during these challenging times.

"The Group has strong foundations, with significant balance sheet and capital strength. This puts us in a good position to take advantage of the exciting and significant opportunities to grow through disciplined investment; further developing our services to customers and deepening customer relationships across all our businesses.

"The pandemic has driven a significant shift in how many of our customers choose to bank and transact, and we continue to examine how we can support them through further development of our digital technologies. However, our commitment to efficiency remains unchanged, and I believe there are significant opportunities to invest in improving our processes through enhanced technology."