Lloyds Bank Q2 2019 earnings represent a resilient quarter with underlying profits just ahead of analyst forecasts.
Underlying profit falls by 9% to £2.03bn for the quarter to end June. On a statutory basis after tax, Lloyds reports statutory profit of £1.02bn, down 10.5% y-o-y.
Go deeper with GlobalData
But provision for PPI miss-selling again rears its ugly head. In the second quarter, Lloyds sets aside a more than expected £550m. This compares to £460m in the year ago quarter. In all, Lloyds has now set aside £20bn for PPI provisions.
Lloyds Bank Q2 2019 highlights
The bank’s balance sheet remains strong with targeted lending and deposit growth in the quarter.
In particular, successful cost cutting results in a 3.3% y-o-y fall in operating costs to £1.95bn. In turn, this helps Lloyds to reduce its cost-income ratio by 60 basis points to 47.1%.
On the other hand, margin pressure results in a modest reduction in the net interest margin. This key measure drops by 4 basis points to 2.89% from 2.93% in the year ago quarter.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataTotal loans inch down by 1% to £441bn. Meantime, total customer deposits are flat year-over-year at £417.6bn.
Lloyds remains committed to maintaining the largest UK branch network as part of its multi-brand, multi-channel strategy.
It is also the largest UK digital bank by customer numbers.
Lloyds Bank Q2 2019 digital banking highlights
The bank’s digitally active customer numbers rise in the second quarter to 15.9 million. Moreover, the bank now has 9.8 million active users of its mobile banking channel.
At the same time, 75% of products are now initiated via digital channels. Lloyds says that its net promoter score increases to +65 for all channels and 67 for digital channels. Both NPS scores are up by around 5 percentage points since year end 2018.
Meantime, Sky News reports that Lloyds is in exclusive talks to snap up Tesco Bank’s £3.7bn mortgage book.
Tesco Bank currently has around 23,000 mortgage customers. In May, Tesco Bank said that it would pull out of the mortgage market, citing tough market conditions.
Lloyds’ share price dipped by 4% on release of its results but are up by 2% for the year to date.
