Lloyds Banking Group pushed up its financial guidance for the year after its quarterly profits beat analysts’ expectations.
The bank said that demand for mortgages had been strong, pushing up interest income. Pre-tax profits for the third quarter beat consensus estimates by more than 50 per cent, reaching £2bn.
The results are the first under Charlie Nunn, who became chief executive in August. He said that he saw “significant opportunities for Lloyds Banking Group to further develop its platforms and capabilities”.
The company said that credit quality was strong and that it would write back charges that it had previously taken for bad loans this year. The impairment charge was a positive £84m in the third quarter, compared with a loss of £301m in the same period in 2020.
Lloyds’ return on tangible equity rose to 14.5 per cent, compared with 6 per cent a year earlier.
Demand for mortgages has been central to Lloyds’ results, with £292bn in the third quarter, an 8 per cent increase year on year. This mirrors results from other banks including Santander and HSBC, which also said they had seen surging demand for mortgages in the UK.
The group has sought new revenue streams to overcome the challenge of low interest rates. According to internal documents, it is aiming to become one of the UK’s largest landlords by purchasing 50,000 homes over the next decade.
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