Despite re-affirming a 2.90 per cent net interest margin target for the year, first quarter results for Lloyds Banking Group (LLOY) reinforced the dispirited mood among UK-facing lenders.
Group chief executive António Horta-Osório echoed his outgoing counterpart at RBS in flagging persistent Brexit uncertainty and its negative impact on the economy, but sought to reassure investors that Lloyds’ “unique business model…market leading efficiency and targeted investment” would help the shares to outperform peers.
Unfortunately, one of the unique facets of that business model has been legacy charges associated with mis-sold payment protection insurance. Charges here sucked up another £100m in the quarter, while a whopping £339m was set aside for “adverse movements in banking volatility” and costs related to exiting the £109bn investment management mandate with Standard Life Aberdeen.
Consequently, pre-tax profits of £1.6bn came in 15 per cent light of consensus forecasts.
