Lloyds Profits Drop 20%, £1.7bn Share Buyback Launched

PUBLISHED: 20 Feb 2025 @ 20:57 | Comments (0) | More info about Fiona Craig

Lloyds (LSE:LLOY) has reported that its annual profit plunged 20.4%, which fell short of market forecasts, as the bank set aside addition money for potential payouts on motor finance.

The company, which is the UK’s largest mortgage lender, revealed a pretax profit of £5.97bn ($7.5bn) for the year 2024, down from £7.5bn in 2023. Analysts had predicted a slightly higher profit of £6.39bn.

The decline was caused by the impact of interest rate cuts on lending margins and the continued sluggishness in Britain’s economic recovery, the bank said.

Net interest margin — the difference between savings and loan rates — fell 16 basis points to 2.95%.

Underlying net interest income fell 7% to £12.8bn amid falling interest rates. Pre-tax profit also tumbled in the fourth quarter to £824m, a 55% drop from the £1.8bn achieved in the previous quarter.

The bank’s net income for the fourth quarter of fiscal 2024 rose by 3.4%, reaching £4.37bn compared to the same quarter in the previous year. However, underlying profit for the quarter plummeted by 43.1% year-on-year to £993m, while earnings per share stood at just 1 pence, a 41.2% decline compared to the same period in 2023.

Lloyds has included a £700m provision for potential remediation costs relating to motor finance commission.

Despite the disappointing results, Lloyd’s share price rose 5% in early trading on Thursday.

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