Lloyds Share Price Edged Higher on Nine-Month Financial Results

Lloyds Banking Group PLC (LON: LLOY) share price edged 1.64% higher after releasing its earnings report for the nine months ended 30 September 2023. The banking group Reported profit after tax of £4.3 billion (£1.4 billion in the third quarter) with a net income of £13.7 billion, marking a 7% increase.

The bank’s return on tangible equity (RoTE) remains robust at 16.6%, reaching 16.9% in the third quarter. Underlying net interest income surged to £10.4 billion, exhibiting a 10% increase, supported by a net interest margin of 3.15%. 

However, the net interest margin dipped to 3.08% in the third quarter, down 6 basis points due to anticipated mortgage and deposit pricing challenges. Average interest-earning assets held steady at £453.5 billion, similar to the fourth quarter of 2022.

Underlying other income registered at £3.8 billion, indicating an 8% uptick. This growth reflects the continued recovery of customer activity and ongoing investments in the business, aligning with strategic initiatives.

Customer deposits amounted to £470.3 billion, decreasing by £5.0 billion (1.0%). This reduction was primarily due to a £9.4 billion decline in Retail current accounts, partially offset by a combined increase of £5.2 billion in Retail savings and Wealth balances. 

Loans and advances to customers experienced a reduction of £2.8 billion, with the total balance standing at £452.1 billion. This included a £2.5 billion exit from a legacy portfolio in the first quarter. However, balances increased by £1.4 billion in the third quarter, driven by growth in various businesses. 

The bank reaffirmed its 2023 guidance along with slightly improved asset quality. 

Charlie Nunn, Lloyds Banking Group CEO, said: “Guided by our purpose, we remain focused on supporting our customers and helping them navigate the uncertain economic environment. The Group continues to perform well. Robust financial performance and strong capital generation in the year's first nine months were driven by net income growth, cost discipline and resilient asset quality. This performance allows us to reaffirm our 2023 guidance. As we set out in the first of our four strategic seminars earlier this month, we are successfully executing our strategic priorities. This supports progress towards our ambition to enable higher, more sustainable returns.”

Lloyds share price. 

The Lloyds share price spiked lower, then edged 1.64% higher to trade at 41.375p, from Tuesday’s closing price of 40.708p.