Lloyds Q1 2019 results fail to match analyst forecasts despite ongoing success in cutting costs.
Statutory profit after tax inches up by 2% from the year ago quarter to £1.2bn. Total revenue is also up by 2% y-o-y to £4.4bn.
Go deeper with GlobalData
Lloyds Q1 2019 drive to cut costs results in operating expenses of £2bn, down by 4% y-o-y.
On the other hand, Lloyds is setting aside a further £100m for PPI provisions. The latest PPI charge takes the bank’s total PPI provisions to an eye-watering £19.25bn.
Other one-off charges include £339m for what Lloyds terms “volatility and other items”.
This includes the estimated break fee relating to the bank’s relationship with Standard Life Aberdeen. Other less positive metrics include a slight dip – 2 basis points – in the net interest margin to 2.91%. Despite the slight reduction the net interest margin remains robust, in line with guidance and ahead of its 2.9% target.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataLloyds Q1 2019 highlights
Arguably the stand out metric is a further cut in the Lloyds cost-income ratio. Already sector beating, Lloyds cost income ratio falls by more than 3 percentage points from a year ago to 44.7%.
Credit quality remains strong with no deterioration in credit risk.
Loans and advances to customers were £441bn billion with growth in targeted segments in the last 12 months. This includes £0.7bn in SME and £1.5bn in motor finance but offset by a reduction of £4.9bn in mortgages.
Lloyds ends the first quarter with a loan to deposit ratio of 106%. The bank continues to expect a return on tangible equity of 14% to 15% in 2019.
Notably, Lloyds remains the only major UK lender with a return on tangible equity above its cost of equity.
Digital highlights include modest progress relating to the roll out of open banking with 60,000 active users. Lloyds is by the far the largest UK digital bank by customer numbers, up 200,000 in Q1 to 15.9 million.
The bank’s overall net promoter score improved from 62 to 64, driven by its branch and digital channels.
Lloyds’ share price dipped by almost 2% on release of the results. But for the year to date, Lloyds’ shares have risen by 22.5%.
