Lloyds Bank posts flat profit on higher impairment charge
Lloyds Bank reported flat annual profits with higher net income and lower costs were offset by impairment charges due to the worsening economic outlook.
Lloyds Banking Group
The UK bank on Wednesday said full year pre-tax profits came in at £6.9bn and added that it would start another £2bn share buyback.
Net income rose 14% to £18bn and impairment charges for potential bad debts surged to £1.5bn compared with a release in 2021 of £1.3bn on the back of an interest rates surge as the Bank of England tries to combat inflation amid the cost of living crisis.
Several rate hikes by the Bank of England were made worse by former prime minister Liz Truss’s disastrous mini-budget in September and saw thousands or mortgage products taken off the market.
Net interest margin, which is the cash the bank rakes in on the difference between lending and savings rates, rose 40 basis points to 2.94% and Lloyds targeted more than 3.05% for 2023 as Britons with deposits continued to be strangled with low returns.
The dividend was lifted to 2.4p a share from 2p.
Britain's biggest lender, which incorporates Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows, raised its medium and long-term return outlook, targeting a return on tangible equity of more than 15% by 2026 against a prior aim of greater than 12%.
Chief executive Charlie Nunn received a total pay package worth £3.8m for 2022, including a £1.3m share bonus and the bank’s staff bonus pool increased by 12% to £446m.
Reporting by Frank Prenesti for Sharecast.com