Lloyds Banking Group recently announced its financial results for the second quarter. Here are the key highlights:
Pretax Profit
Lloyds reported a pretax profit of £1.61 billion ($2.08 billion) for the quarter, slightly below the estimated £1.72 billion but higher than the restated £1.54 billion from the same period last year.
Net Income
The FTSE 100-listed lender posted a net income of £4.53 billion for the three months ended June 30, surpassing the consensus’ estimate of £4.51 billion and the restated £4.03 billion from the previous year. In addition, net interest income was £3.47 billion, exceeding both the consensus’ estimate of £3.43 billion and the restated £2.945 billion from the second quarter of 2022.
Key Metrics Watch
CET1 Ratio
Lloyds closed the quarter with a common equity Tier 1 ratio of 14.2%, aligning with expectations.
Return on Tangible Equity (ROTE)
The lender’s return on tangible equity for the second quarter was 13.6%, slightly lower than the anticipated 14.3%. However, Lloyds raised its full-year guidance to over 14%, up from around 13% previously, which is higher than the consensus’ expected 14.5% for the year.
Net Interest Margin (NIM)
Lloyds reported a banking net interest margin of 3.14% for the quarter, surpassing market views of 3.10%. The bank also upgraded its 2023 guidance to over 3.10%, compared to the previous estimate of 3.05%, and against the consensus’ projected 3.12% margin for the year.
Costs
Operating costs for the bank amounted to £2.24 billion, in line with market expectations. Lloyds reiterated its operating cost target of around £9.1 billion for the year.
Capital Returns
Lloyds declared an interim dividend of 0.92 pence per share, matching the consensus and representing an increase from the previous year’s payout of 0.80 pence.