Lloyds backs FY expectations as Q1 profit beats expectations

(Sharecast News) - Lloyds Banking Group reiterated its full-year guidance on Wednesday as it reported a 33% jump in first-quarter pre-tax profit to £2.0bn, beating consensus expectations of £1.8bn. In the three months to the end of March, underlying net interest income rose 8% on the year to £3.6bn. Lloyds said this reflected a higher banking net interest margin of 3.17%, up 14 basis points year-on-year.

Operating costs fell 3% to £2.5bn, reflecting higher cost savings and a lower severance expense, partially offset by business growth costs, inflationary pressures and the impact of Lloyds Wealth (Schroders Personal Wealth).

Return on equity was 17%, up from 12.6% in the same period a year earlier.

Lloyds reiterated its 2026 guidance for underlying net interest income to be greater than £14.9bn, a cost to income ratio of less than 50% and a return on tangible equity greater than 16%.

Chief executive Charlie Nunn said: "In the first quarter of 2026, the group delivered sustained strength in financial performance, growing our income, maintaining our cost discipline and delivering strong profitability. Our differentiated business model remains resilient in the context of the current economic uncertainties. We remain focused on supporting UK households and businesses as they look to strengthen their financial positions and achieve their goals.

"We are building strategic momentum during the final year of our current plan, providing innovative ways for our customers to manage their financial needs and achieve their financial aspirations. We are confident in our delivery for the year ahead and reiterate our guidance for 2026. We look forward to presenting our new strategy alongside the half-year results."

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