The release of reserves set aside to deal with an expected wave of pandemic-induced defaults boosted Lloyds’ profits.
Profit before tax at Britain’s biggest mortgage lender in the three months to September climbed around £1bn compared to the same period last year.
Lloyds’ bottom line was raised by the release of over £80m in reserves in the third quarter, compared to a £301m credit impairment charge in the same period last year.
Net income climbed 20 per cent over the last year to over £4bn for the third quarter, driven by strong appetite for mortgages amid a red hot UK housing market.
This was the first set of results overseen by Lloyds’ fresh chief executive Charlie Nunn.
“Building on the strengths of the Group and its achievements in recent years, there are clearly significant opportunities for Lloyds Banking Group to further develop its platforms and capabilities and grow through disciplined investment, empowering colleagues, enhancing collaboration and increasing agility across the Group,” he said.
Customer deposits swelled £4.7bn over the last quarter, extending a trend seen throughout much of the pandemic as consumers stored away savings amassed during lockdowns.
Lloyds’ common equity tier one ratio, a measure of the strength of a bank’s balance sheet strength, hit 17.2 per cent.
The bumper crop of results is the latest in a string of big British banks posting robust earnings, indicating the sector is in rude health. Barclays registered its best ever third quarter on an annual basis last week.