The first quarter saw Lloyds Banking Group take an impairment of £1.43bn due to the changes made to its economic outlook in the wake of the COVID-19 pandemic
Lloyds Banking Group headquarters in London. (Credit: Carcharoth/Wikipedia.org)
Lloyds Banking Group has reported a 95% drop in its statutory profit before tax at £74m for the first quarter of 2020 (Q1 2020) compared to £1.6bn it made in the same quarter of 2019 (Q1 2019).
In the preceding quarter that ended 31 December 2019, Lloyds Banking Group saw a statutory profit before tax of £1.44bn.
The British financial institution took an impairment of £1.43bn in Q1 2020, which reflected the changes made to its economic outlook in the wake of the COVID-19 pandemic. This was in comparison to an impairment of £275m in the same quarter of 2019.
The earnings per share in Q1 2020 that ended 31 March was down by 67% at 0.5p compared to 1.5p in Q1 2019.
The net income of the banking group was down by 11% at £3.95bn in Q1 2020 compared to £4.42bn in the corresponding quarter in 2019. The group’s operating costs in the reported quarter came down by 4% at £1.87bn compared to £1.95bn in the same period the year before.
Lloyds Banking Group’s loans and advances grew by £2.7bn in the reported quarter to £443.1bn, with increased corporate lending that was mainly due to drawdowns of existing corporate facilities, which was offset partially by expected reductions in the mortgage book and reductions in credit cards, where customer activity came down in March.
The group said that it had a solid trading surplus of £1.98bn in Q1 2020, which is down by 19% compared to Q1 2019. However, it was up by 7% compared to Q4 2019.
Lloyds Banking Group said that almost 90% of its branches remain to be open during the prevailing coronavirus outbreak, while ATM availability is more than 95%.
Lloyds Banking Group chief executive comments on the Q1 2020 results
Lloyds Banking Group chief executive António Horta-Osório said: “The coronavirus pandemic presents an unprecedented social and economic challenge which is having a significant impact on people and businesses in the UK and around the world.
“The economic outlook is clearly challenging with the longer-term outcome dependent on the severity and length of the pandemic and the mitigating impact of Government and other measures in the UK and across the world.
“Throughout this period of uncertainty we will continue to work closely with Government, regulators and other authorities and use the strength of our balance sheet and business model to ensure that we play our part in supporting our customers and the UK economy.”