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Lloyds pulls guidance as profit slumps 95% on credit losses

By BFN News | 07:19 AM | Thursday 30 April, 2020

Lloyds pulled its guidance after first-quarter profit plunged 95% and the bank warned of further credit losses in the second quarter after taking impairments of £1.4bn, owing to the impact of Covid-19 pandemic on the customers. Pre-tax profit fell 95% to £74m on-year and income slipped 11% to £3.9bn in the first quarter on-year. The impairment charge in the quarter increased 'significantly to £1,430m from £844m, primarily driven by updates to the group's economic outlook and some charges relating to existing restructuring cases,' the company said. Net interest margin dropped to 2.79% from 2.91% and return on tangible equity (RoTE) fell to 5% from 12.5%. The common equity tier one (CET1) ratio fell to 14.2% from 13.9%. Looking ahead, the bank said its previous guidance was no longer appropriate given the 'significant' change in the operating environment and economic expectations as a result of the coronavirus pandemic. 'The impact of lower rates, lower levels of activity and higher impairment on the group's business will continue into the second quarter, but remains difficult to quantify given the significant uncertainty,' it added. Story provided by

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