 announce strong financial performance for the first nine months of the year, profit jumped 50% to £3.1bn and PPI costs fall.){kind=link}
Lloyds Banking Group (LON:LLOY) have announced strong financial performance for the first nine months of the year as profit jumped 50% to £3.1bn.
The company’s underlying profit for the quarter was £2.1 billion. This is up 9% from the previous year and in line with analysts polled by Bloomberg.
Lloyds’ net interest margin for the first nine months of the year was 2.85%, up 13 basis points from the previous year. In the firm’s half year report they forecasted their net interest margin to be 2.85% at the end of the year. They still expect this to be the case.
Lloyds report that the increase in net interest margin has been driven by both “lower deposit and wholesale funding costs” as well as benefits experienced from the acquisition of credit card business MBNA.
Common Equity Tier 1 (CET1) capital ratio was also up in the first nine months of the year. The CET1 capital ratio was 14.1%, an increase from 13.8% in December 2016. Lloyds believe that the CET1 capital ratio needs to be at 13% in order to “grow the business, meet regulatory capital requirements and cover uncertainties”.
Lloyds also managed to avoid incurring more costs resulting from PPI claims. This is despite the number of claims per week being above the 9,000 the firm forecasted for the third quarter. Claim levels had reached 16,000 and dropped to 11,000 per week.
António Horta-Osório, group chief executive, said that “we have delivered strong financial performance” and that the results “highlight the strength of our customer focused, simple and low risk business model”.
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Horta-Osório also noted that the firm have “announced improved financial targets for 2017, reflecting the strong financial performance in the year, and we remain on track to deliver our longer term guidance”.
Lloyds’ stock price had plummeted as much as 2.5% at the start of trading today, however has rallied considerably to 68.1p, a rise of 1% at the time of writing.