Lloyds reports £2.3bn third-quarter pre-tax profit, beating expectations
Lloyds Banking Group reported a £2.3bn pre-tax profit for the third quarter, almost double a year earlier and slightly above consensus. The results came a day after the Chancellor's Budget raised the bank tax surcharge.
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The story, neutrally told
Mixed · 2Lloyds Banking Group reported a pre-tax profit of £2.3bn for the third quarter. City A.M.RC “The FTSE 100 giant reported a £2.3bn pre-tax profit for the latest three months” Read at City A.M. ↗ Evening StandardN “reported a pre-tax profit of £2.3 billion for the third quarter” Read at Evening Standard ↗ Mixed · 2That is almost double the £1.2bn made in the same period a year earlier (City A.M. puts the rise at nearly 99 per cent). Evening StandardN “This was almost double the £1.2 billion it made the same period a year ago.” Read at Evening Standard ↗ City A.M.RC “up nearly 99 per cent on last year’s figure” Read at City A.M. ↗ Centre · 1Last year's figure was depressed by an extra £800m provision for the UK regulator's motor finance redress scheme, which compensates people mis-sold car loans; the scheme is currently on hold while it faces legal challenges in court. Evening StandardN “Last year’s profit figure was affected by the group setting aside an extra £800 million provision”“The scheme is currently on hold while it faces legal challenges in court.” Read at Evening Standard ↗
Right · 1City A.M. reported that profit beat the group's internal consensus by two per cent, with costs of £2.37bn undershooting consensus by £28m and a cost-to-income ratio of 47.2 per cent against the 48 per cent expected. City A.M.RC “Profit skimmed past the group’s internal consensus by two per cent after the bank cut its operating costs.”“Its cost-to-income ratio came in at 47.2 per cent, against the 48 per cent expected.” Read at City A.M. ↗ Right · 1Income rose nine per cent to £5bn, broadly in line with expectations, and return on tangible equity was 19.5 per cent, up from 17 per cent in the second quarter and above full-year guidance of around 16 per cent. City A.M.RC “a nine per cent jump in income to £5bn, falling broadly in line with expectations”“was 19.5 per cent for the period, up from 17 per cent in the second quarter” Read at City A.M. ↗ Centre · 1The Evening Standard attributed the improvement to higher interest income, saying underlying net interest income rose 10% year on year and that earnings strengthened even excluding the motor finance effect. Evening StandardN “Underlying net interest income, which shows the difference between what banks make from loans and what they pay out on deposits, jumped by 10% year-on-year.”“Stripping out that impact, earnings still strengthened year-on-year” Read at Evening Standard ↗
Right · 1City A.M. said Lloyds' slides warned costs were likely to rise in the fourth quarter after payment of the UK bank levy and end-year phasing of investment spend. City A.M.RC “costs were likely to rise in the fourth-quarter following the payment of the UK bank levy” Read at City A.M. ↗ Right · 1Chief executive Charlie Nunn said the bank was beginning a new strategy, Accelerate 2030, which targets around £2bn of cost savings by 2030 and a cost-to-income ratio below 45 per cent in 2030, against a 50 per cent target for 2026. City A.M.RC “The group is targeting around £2bn in cost savings by 2030.”“would reduce to less than 45 per cent in 2030, which will mark a drop from a 50 per cent target for 2026” Read at City A.M. ↗ Mixed · 2The results came a day after Chancellor John Healey's Budget doubled the bank corporation tax surcharge by 3 percentage points to six per cent from January for 15 months. City A.M.RC “The Chancellor doubled the surcharge, which sits on top of corporation tax, to six per cent from January for 15 months.” Read at City A.M. ↗ Evening StandardN “banks would have to pay a temporary extra 3% on their corporation tax surcharge, double the current rate from January” Read at Evening Standard ↗
Centre · 1Healey said he was asking "a bit more of our banks to support ordinary people", with the money helping fund support for household energy bills; the Office for Budget Responsibility expects the measure to raise around £1.5bn. Evening StandardN “John Healey said he was asking “a bit more of our banks to support ordinary people””“expected to raise an extra £1.5 billion for the Treasury over the 15 months” Read at Evening Standard ↗ Right · 1City A.M. said Lloyds shares surged because the rise was smaller than many in the City had expected, with some anticipating a permanent surcharge at the 2023 level of eight per cent. City A.M.RC “Lloyds shares surged following the news after the tax hike came below expectations” Read at City A.M. ↗
Every sentence links to the reporting it rests on. The pill in front of each says where its sources sit: Left, Centre or Right when one side supplies at least half of them, Mixed when they are evenly split. The number is how many outlets it cites.
Left0 outlets
No left outlet in our sources has covered this story yet.
Centre1 outlet
- Framing
- The Evening Standard leads with the profit increase as a result of higher interest rates and ties it to the previous day's bank tax rise.
- Emphasis
- Net interest income, the motor finance base effect and the purpose of the tax rise (household energy bill support).
- Leaves out or plays down
- Does not report the comparison with analyst expectations, cost figures, return on tangible equity or the share price reaction.
- Charged language
- “near-doubling”
- For example
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“Lloyds Banking Group has revealed a near-doubling of its profits after getting more income from higher interest rates” — Evening Standard
“a day after the Chancellor said he was hiking bank taxes to fund cost-of-living support” — Evening Standard
Right1 outlet
- Framing
- City A.M. leads with a beat against expectations driven by cost discipline, and treats the Budget as a 'tax raid' that came in lighter than feared.
- Emphasis
- Cost base, cost-to-income ratio, return on tangible equity, Accelerate 2030 savings and the share price reaction.
- Leaves out or plays down
- Does not mention that the motor finance scheme is on hold, or the 10% rise in underlying net interest income.
- Charged language
- “slashing its cost base”“tax raid”
What every side reports
- Lloyds reported a £2.3bn pre-tax profit for the third quarter, roughly double a year earlier.
- Last year's figure was hit by an extra £800m motor finance provision.
- The results followed a Budget that raised the bank surcharge to six per cent from January for 15 months, expected by the OBR to raise about £1.5bn.
Where accounts differ
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What drove the profit increase
- Centre
- The Evening Standard credits higher income from interest rates, with underlying net interest income up 10%.
- Right
- City A.M. credits lower costs and the absence of major impairment charges, with income broadly in line with expectations.
Lloyds Banking Group organisation
Chief executive Charlie Nunn framed the results as the close of the current strategy and the start of Accelerate 2030, aimed at sustainable value for customers and shareholders.
“As we near completion of our current strategic chapter, we are excited to begin executing on our new strategy, Accelerate 2030.” — City A.M.
Left0 articles
No coverage yet.
Centre1 article
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Lloyds reports profit increase as bank gets boost from higher rates
Neutral Explains the profit rise through interest income and sets it beside the Chancellor's bank tax rise and its purpose.
Right1 article
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Lloyds beats profit expectations after tightening costs
Mixed Business-focused beat-on-expectations story stressing cost control, with a critical note on the Budget bank levy.
- 29 Oct 07:30 First City A.M.RC Lloyds beats profit expectations after tightening costs
- 29 Oct 07:46 +16m Evening StandardN Lloyds reports profit increase as bank gets boost from higher rates
Times are when each article was published, or when we first saw it if the outlet gave no time.
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