Lloyds Banking Group noticed pre-tax earnings soar 57% to £7.5bn final yr, as a result of greater rates of interest, whereas its key mortgage e book remained broadly flat.
The lender, which incorporates Bank of Scotland and Halifax, mentioned its open home loans e book edged 0.4% decrease to £298.5bn over the past 12 months, whereas its closed e book fell 34% to £7.7bn.
In its full-year assertion, it added that the reductions have been as a result of “the impact of securitisation of £2.5bn of legacy retail mortgages (including £2.1bn in the closed mortgage book) during the first quarter of 2023 and £2.7bn of Retail unsecured loans in the fourth quarter of 2023”.
The financial institution mentioned its internet curiosity margin – the distinction between what it pays to savers and takes in from lenders – lifted by 17 foundation factors over the yr to three.11%.
It added that its margin “benefited from UK bank rate increases and higher structural hedge earnings from the rising rate environment, partly offset by expected headwinds due to deposit mix effects and asset margin compression, particularly in the mortgage book”.
However, the business added that it anticipated three rate of interest cuts from the Bank of England this yr. The central financial institution’s base price is at present 5.25%.
The financial institution additionally put aside £450m to cowl the potential cost of an investigation into automobile finance offers launched by the Financial Conduct Authority final month.
Lloyds Banking Group chief government Charlie Nunn mentioned: “The group delivered a sturdy monetary efficiency, assembly our 2023 steerage, pushed by revenue progress, cost self-discipline and powerful asset high quality.
“This performance enabled strong capital generation and increased shareholder distributions.”
