Lloyds Banking ​Group posted a 33% ​rise in first ‌quarter profit, ⁠beating analysts’ forecasts, ⁠and said ​it was on track to meet its performance ​goals ‌for the year.

The parent group of Bank of Scotland and Scottish Widows, increased lending income ​while trimming operating costs.

Statutory profit ‌before tax for January-March came in at £2 billion, ​up from £1.52bn ‌in the same period a year ⁠ago ⁠and above the average ‌analyst estimate of £1.84bn.

The bank grew its loan book, held deposits broadly steady and generated solid capital, allowing it to reaffirm 2026 guidance for higher net interest income, a cost:income ratio below 50% and return on tangible equity above 16%, signalling confidence despite economic uncertainty.

The net interest margin of 3.17% is up 14 basis points year-on-year and up 7 basis points compared to the fourth quarter.

A remediation charge of £11 million was recognised by the group across a small number of pre-existing rectification programmes. There has been no change to the provision for motor finance commission arrangements, following the announcement of the final rules of the industry wide redress scheme.

However, it said there remain a number of uncertainties including response rates, operational costs, litigation and the result of challenge from other parties which could impact the ultimate outcome.

Chief executive Charlie Nunn said: “The group delivered sustained strength in financial performance, growing our income, maintaining our cost discipline and delivering strong profitability. We are confident in our delivery for the year ahead and reiterate our guidance for 2026.” 

Nick Sherrard, managing director of Label Sessions, said: “Despite the challenging backdrop, Lloyds continues to demonstrate its resilience in this latest set of strong results.

“With interest rates likely to remain higher for longer and lower-than-expected need to set aside capital to cover bad loans – which itself could be seen as a vote of confidence in the UK economy given Lloyds’ exposure to the market – today’s update could mean the bank now has the space to shape its own future.

“Innovation and new services will be crucial here, as Lloyds needs to find ways to genuinely engage with customers and create real loyalty. Lloyds Wealth is a huge opportunity, and a key test of its ability to embrace what’s next in financial services.”

Chris Beauchamp, chief market analyst at investing and trading platform IG, said: “There’s little hint in today’s numbers from Lloyds of the impairment problems that hit Barclays yesterday, with the picture instead being one of a bank making solid progress.

“After two years of share price gains, these results show that Lloyds remains well-placed to continue its progress, but much now hinges on how well the UK economy weathers the energy crisis looming over it.”