As with most banks reporting first-quarter figures, the rise in global interest rates buoyed its net interest income.

Lloyds Banking Group yesterday reported a rise in its statutory pre-tax profit for the first three months of 2023, rising by £611 million ($765 million) to £2.068 billion.

Higher total income was partly offset by higher operating costs and the impact of an increased impairment charge, the UK-listed group said yesterday.

Total income for the first three months was £4.629 billion, an increase of 21 per cent on 2022, primarily reflecting higher net interest income in the quarter. A similar pattern has applied to other banks in their Q1 figures as global interest rates have risen. 

Net interest income of £3.542 billion rose 21 per cent on the prior year, driven by stronger margins and higher average interest-earning banking assets. 

Total operating costs – £2.315 billion – rose 6 per cent on a year ago.

There was a net impairment charge of £246 million in Q1, up from £178 million a year ago.

The group said that its total capital ratio increased from 20.5 per cent at 31 December 2022 to 21.2 per cent at 31 March 2023 reflecting the increase in Common Equity Tier 1 capital, the issuance of a new Additional Tier 1 capital instrument and an increase in eligible provisions recognised through Tier 2 capital, the bank added.