“The group delivered a robust financial performance in 2023, meeting our guidance. Income growth has been supported by a higher banking net interest margin and good momentum in underlying other income. We continued to manage costs tightly despite ongoing inflationary pressures. Asset quality remained strong,” the bank said in a statement today.

The lender said it had £675 million of remediation costs in the year, up from £255 million in 2022, linked to pre-existing programmes and a £450 million provision to prepare for the possible impact of a UK regulatory review into historical motor finance commission payments.

Lloyds said its Common Equity Tier 1 capital ratio – a bank’s standard measure of capital “shock absorber” – was 13.7 per cent at the end of December 2023, ahead of its revised target of about 13 per cent. The bank said its “strong capital position” meant that it intends to carry out a buyback of up to £2 billion or ordinary shares.

Looking ahead, the bank predicts a net interest margin of more than 290 basis points (bps); operating costs of about £9.3 billion, return on tangible equity of about 13 per cent; and to adjust its CET1 ratio of about 13.5 per cent.

In its wealth business, Lloyds said that at the end of 2023, it had £10.9 billion of client deposits, falling by £3 billion. As far as loans and advances to clients are concerned, the wealth figure was unchanged last year from 2022, at £900 million, Lloyds said.