By Sabela Ojea

 

Lloyds Banking Group PLC on Wednesday reported a slight increase in pretax profit for the second quarter of 2022, which came in ahead of market views, and said that it has strengthened its outlook for the whole year.

The U.K. bank posted a pretax profit of 2.04 billion pounds ($2.45 billion) for the three months ended June 30 compared with GBP2.01 billion for the year-earlier period. It was expected to decline to GBP1.59 billion, taken from the lender's compiled forecasts for the quarter.

The FTSE 100-listed lender's net income rose to GBP4.34 billion from GBP3.90 billion for the same period a year earlier. Net income was expected to rise to GBP4.14 billion, taken from the bank's compiled consensus for the period.

The bank ended the period with a common equity Tier 1 ratio--a key measure of balance-sheet strength--of 14.7% versus an expectation of 14.6%, and declared a dividend of 0.80 pence a share, up from 0.67 pence a year earlier. The board was anticipated to declare an interim dividend of 0.75 pence.

Total costs decreased to GBP2.18 billion from GBP2.37 billion, but were significantly higher than the market expected. Total costs were forecast at GBP1.91 billion, taken from Lloyds's compiled forecasts.

Regarding its outlook, the bank said it now sees a net interest margin greater than 280 basis points and a capital generation greater than 200 basis points, as well as a return on tangible equity of around 13%.

"While the world has changed significantly since February, our strategic focus remains clear and disciplined. Our strong financial performance demonstrates the resilience of our business model and customer relationships, and has enabled us to enhance guidance for 2022," Chief Executive Charlie Nunn said.

 

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

 

(END) Dow Jones Newswires

July 27, 2022 03:11 ET (07:11 GMT)

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