The UK-headquartered lender said rising net income and lower volatility were more than outweighed by higher operating costs and a higher impairment charge.

Lloyds Banking Group today reported statutory profit after tax of £1.1 billion ($1.46 billion) in the first three months of 2025, down from a year ago, when it was £1.2 billion. Rising net income and reduced volatility were more than offset by higher operating costs and a higher impairment charge. 

Underlying net interest income came in at £3.3 billion, rising 3 per cent from a year ago. 

The UK-listed group said operating costs rose 6 per cent year-on-year to £2.6 billion, combining inflationary pressures, timing of strategic investment including planned higher severance front-loaded into the first quarter of 2025, and business growth costs, partly offset by cost savings and continued cost discipline.

Underlying loans and advances to customers increased by £7.1 billion in the quarter to £466.2 billion, led by UK mortgages growth of £4.8 billion. Customer deposits increased in the quarter by £5.0 billion to £487.7 billion, with £2.7 billion growth in retail and £2.3 billion in commercial banking.

The lender had a Common Equity Tier 1 ratio – a standard international measure of a bank’s capital shock absorber – of 13.5 per cent. 

Looking ahead, Lloyds said it expects to earn return on tangible equity of about 13.5 per cent in 2025.