Lloyds Q1 pretax profit rises 33% on higher income, lower costs

Lloyds Banking

29/04/2026 07:15

Overview

UK banking group's Q1 pretax profit rose 33% yr/yr on higher income and lower costs

Underlying net interest income grew 8% yr/yr, with net interest margin up to 3.17%

Operating costs fell 3% yr/yr due to cost savings and lower severance expense

Outlook

Lloyds expects 2026 underlying net interest income to be greater than £14.9 bln

Company sees 2026 cost:income ratio below 50% and operating costs under £9.9 bln

Lloyds expects 2026 return on tangible equity above 16% and CET1 ratio around 13.0%

Result Drivers

STRUCTURAL HEDGE AND VOLUME GROWTH - Higher net interest income was driven by increased structural hedge earnings and growth in average interest-earning assets, especially UK mortgages and commercial lending

OTHER INCOME GROWTH - Underlying other income rose 11% yr/yr, supported by increased customer activity and benefits from strategic initiatives, though commercial banking markets income was pressured by market volatility

COST SAVINGS - Operating costs fell 3% yr/yr due to increased cost savings and lower severance expense, partially offset by inflation and growth costs

Company press release: ID:nRSc2942Ca

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Net Interest Margin
3.17%
Q1 Pretax Profit
GBP 2.03 bln
Q1 Underlying Net Interest Income
GBP 3.57 bln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", 4 "hold" and 2 "sell" or "strong sell"

The average consensus recommendation for the banks peer group is "buy"

Wall Street's median 12-month price target for Lloyds Banking Group PLC is GBp120.00, about 21.7% above its April 28 closing price of GBp98.57

The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 10 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)