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Highlights

  • Q1 2025 statutory profit after tax stood at £1.1 billion, slightly below last year’s £1.2 billion, but supported by a 4% increase in net income.

  • Underlying net interest income rose to £3.3 billion, up 3% year-on-year, driven by margin growth and higher interest-earning assets.

  • 2025 full-year guidance reaffirmed, including targeted net interest income of ~£13.5 billion and return on tangible equity of ~13.5%.

Lloyds Banking Group plc (LSE:LLOY) has posted a statutory profit after tax of £1.1 billion for the first quarter of 2025, as announced in its Q1 results update. While the figure represents a modest decline from £1.2 billion recorded in Q1 2024, the Group delivered a 4% increase in net income.

The Group’s return on tangible equity remained robust at 12.6%, slightly down from 13.3% in the prior-year period but still reflecting profitability. The minor decline was attributed to higher operating costs and a greater impairment charge, though these were more than offset by improved income and reduced market volatility.

A key performance driver was Lloyds’ underlying net interest income, which reached £3.3 billion for the quarter. This marks a 3% year-on-year increase and a 1% rise from the previous quarter. The performance was bolstered by a banking net interest margin of 3.03%, representing an increase of 8 basis points from the same quarter in 2024 and 6 basis points above Q4 2024. Higher average interest-earning banking assets, totalling £455.5 billion, also contributed to the income gains.

In addition to interest income, Lloyds also reported an 8% year-on-year increase in underlying other income, which rose to £1.5 billion. This growth was driven by enhanced customer activity across business segments and the continued implementation of strategic initiatives.

Despite the quarter's modest dip in bottom-line profit, Lloyds reaffirmed its full-year 2025 financial guidance, reflecting confidence in the underlying business fundamentals and current macroeconomic outlook. The Group expects underlying net interest income to be approximately £13.5 billion, operating costs to remain near £9.7 billion, and a return on tangible equity of around 13.5%. It also anticipates a capital generation of about 175 basis points and an asset quality ratio of 25 basis points for the full year.