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.

Lloyds gave few details on its wealth management business performance.