Lloyds Banking Group (LLOY) Q1 2025 earnings summary

Executive summary

• Net income grew 4% year-over-year to £4.4bn, with statutory profit after tax of £1.1bn and return on tangible equity (ROTE) of 12.6% in Q1 2025.

• Lending increased by £7.1bn (2%) and deposits by £5.0bn (1%) in Q1, with asset quality remaining resilient despite higher impairment charges.

• Strategic execution, transformation, and a differentiated business model underpin confidence in 2025 and 2026 guidance.

Financial highlights

• Net income reached £4,391m, up 4% year-over-year, with net interest income of £3,294m and NIM at 3.03%, up 6bps sequentially.

• Statutory profit after tax was £1,134m, down 7% year-over-year but up 62% from Q4 2024.

• Operating costs rose 6% year-over-year to £2,550m, mainly due to inflation, investment, and front-loaded severance.

• Asset quality ratio was 0.27%, with a £309m impairment charge including a £100m central adjustment for tariff-related risks.

• Tangible net asset value per share increased to 54.4p, up 2.0p from Q4.

• CET1 ratio stood at 13.5%, with capital generation of 27bps in Q1.

Outlook and guidance

• 2025 guidance reaffirmed: net interest income c.£13.5bn, operating costs c.£9.7bn, ROTE c.13.5%, asset quality ratio c.25bps, capital generation c.175bps.

• 2026 guidance: ROTE >15%, capital generation >200bps, and CET1 ratio target c.13.0% by end-2026.

• Operating cost guidance for 2025 reaffirmed at £9.7bn.