Key Morningstar Metrics for Lloyds Banking Group
What We Thought of Lloyds Banking Group’s Earnings
Lloyds lifted underlying profitability guidance for 2025 on lower expected loan losses and higher net interest income to return on tangible equity of about 14% from about 13.5% previously. A GBP 800 million provision related to the UK motor finance probe tempered 2025 return expectations slightly.
Why it matters: The Financial Conduct Authority consultation proposal announced on Oct. 7 about the motor finance redress scheme makes more cases eligible than previously modeled by Lloyds, leading to an additional provision charge. The redress scheme is a negative spot on an otherwise good equity story for Lloyds.
- Underlying performance was good with volume growth in mortgages (up GBP 3.1 billion versus the previous quarter) and an expanding net interest margin (up 2 basis points) as the…
