Lloyds Banking Group recently announced its financial results for the second quarter. Here are the key highlights:
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.
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
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.
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.
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.