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Lloyds Bank posts robust first-quarter profits despite Brexit fears

Lloyds Bank posts robust first-quarter profits despite Brexit fears
FILE PHOTO: A woman looks at her phone as she walks past a branch of Lloyds bank in London, Britain, July 20, 2018. REUTERS/Toby Melville -
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TOBY MELVILLE(Reuters)
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By Iain Withers and Lawrence White

LONDON (Reuters) - Britain's biggest mortgage lender Lloyds Banking Group has posted robust first quarter profits against a backdrop of cooling house prices and dwindling confidence among its business borrowers.

Lloyds reported an after tax profit of 1.2 billion pounds for the period, slightly below expectations of 1.39 billion pounds according to a company-provided average of analyst forecasts, but up from 1.15 billion pounds the previous year.

The bank reported underlying profit of 2.2 billion pounds, up 8 percent on the previous year and beating expectations of 2.05 billion pounds.

The results follow disappointing first quarter results from Royal Bank of Scotland and Barclays, who blamed their falling margins on intensifying competition in mortgages and slowing business investment due to Brexit uncertainty.

Lloyds said that while continuing uncertainty over Brexit could further impact the economy, it had seen no deterioration in the quality of assets on its loan book and reaffirmed all its financial targets.

The bank's core capital ratio - a key measure of a bank's financial strength - increased three basis points to 14.2 percent quarter-on-quarter.

Lloyds received a boost on Wednesday after regulators at the Bank of England said it could hold a lower capital buffer against future risks, giving Lloyds a further 1 billion pounds of excess capital which analysts speculated could be returned to investors.

The bank has been ramping up payouts for shareholders over the past two years as profits have improved and after returning to private ownership in 2017 following a state bailout during the financial crisis.

(Reporting by Iain Withers and Lawrence White, editing by Sinead Cruise)

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