LYG - Lloyds maintains FY outlook posts strong Q3 profit
2023-10-25 11:02:35 ET
Lloyds Banking Group ( NYSE: LYG ) reaffirmed its FY outlook and reported strong Q3 profit, as Britain's largest mortgage lender continued to benefit from higher interest rates.
The company reported Q3 profit before tax of 1.9B pounds, up on 576M pounds in the same period last year, which had to be restated due to accounting changes.
Banks, who have been reaping benefits due to high interest rates, are now having to battle an increasing risk of bad loads due to a prevailing cost of living crisis.
LYG's net interest margin- a key measure of profitability for banks- was 3.08% down 6 basis points as compared to the prior quarter, due to "expected mortgage and deposit pricing headwinds".
The company also reported a rise in its operating costs to 6.7B pounds on a year to date, primarily over macroeconomic trends of rise in prices and wage inflation.
US-listed shares of the firm up 1.94% at $1.97.
LYG's rival Barclays ( BCS ) stock tumbled 6.4% in U.S. trading late Tuesday morning after the bank finetuned guidance for its U.K. bank's net interest margin. It also said potential cost-cutting measures could lead to material additional charges in Q4.
Lloyds ( LYG ), however, maintained its FY outlook and added it expected asset quality to be slightly improved.
The company said continues to expect its net interest margin for the year to be greater than 310 basis points.
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Lloyds maintains FY outlook, posts strong Q3 profit