Lloyds Banking Group has revealed a massive drop in profit after taking a major hit from worsening economic conditions in the first three months of the year.

It said a massive £1.4bn impairment charge had left profits in the doldrums. Pre-tax profit plunged 95 per cent to £74m, down from more than £1.6 billion in the same three months of last year.

It marks a major challenge for the bank as it tries to prop up ailing businesses during the coronavirus crisis.

Download the new Independent Premium app

Sharing the full story, not just the headlines

Chief executive Antonio Horta-Osorio 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."

Net income hit just under £4bn, down from £4.4bn in the same period last year. Profit after tax fell 60 per cent to £480m, while costs fell marginally to £2bn.

The bank said it had lent around £410m to some 3,000 small businesses as part of the government's Coronavirus Business Interruption Loan Scheme (CBILS).

It has also given payment holidays to 83,000 motor finance customers, 175,000 customers who have taken out personal loans, and 219,000 credit card holders.

More than 400,000 mortgage-holders have also been granted a payment holiday.

The bank withdrew its financial guidance for investors, saying the longer-term impact of Covid-19 is not yet clear.

Both senior staff and executives will not be given a bonus this year, the bank told investors, who already had their dividends slashed last month.

Mr Horta-Osorio added: "I would like to pay tribute to the exemplary dedication being shown by all our colleagues across the group providing vital banking services to those in need, but also in going above and beyond in countless and often unseen ways to support the most vulnerable."

PA

Comments

Share your thoughts and debate the big issues

Learn more
Please be respectful when making a comment and adhere to our Community Guidelines.
  • You may not agree with our views, or other users’, but please respond to them respectfully
  • Swearing, personal abuse, racism, sexism, homophobia and other discriminatory or inciteful language is not acceptable
  • Do not impersonate other users or reveal private information about third parties
  • We reserve the right to delete inappropriate posts and ban offending users without notification

You can find our Community Guidelines in full here.

Create a commenting name to join the debate

Please try again, the name must be unique Only letters and numbers accepted
Loading comments...
Loading comments...
Please be respectful when making a comment and adhere to our Community Guidelines.
  • You may not agree with our views, or other users’, but please respond to them respectfully
  • Swearing, personal abuse, racism, sexism, homophobia and other discriminatory or inciteful language is not acceptable
  • Do not impersonate other users or reveal private information about third parties
  • We reserve the right to delete inappropriate posts and ban offending users without notification

You can find our Community Guidelines in full here.

Loading comments...
Loading comments...