Lloyds Banking pretax profit nearly doubles in third quarter

Lloyds Banking Group PLC on Thursday said pretax profit nearly doubled in the third quarter from a year before, amid a strong rise in net interest income, and the lender confirmed its annual guidance.

Lloyds said pretax profit was £2.33 billion in the three months that ended September 30, nearly doubled from £1.17 billion a year earlier, supported by higher income and lower remediation charges. Remediation charges dropped to just £22 million from £875 million a year before.

Underlying net interest income rose 10% to £3.81 billion from £3.45 billion, while banking net interest margin improved to 3.25% from 3.06%.

Underlying pretax profit was £2.37 billion, up from £1.29 billion a year before. Earnings per share were 2.8 pence, up from 1.0p.

Shore Capital called the results a "low quality beat". Pretax profit was 2% ahead of market consensus, while underlying pretax profit was 1% ahead, Shore noted. EPS was 8% ahead, but this was due to a lower-than-expected tax charge.

The broker also noted that guidance was left unchanged.

Lloyds shares were down 3.4% to 100.40 pence early Thursday in London.

For the first nine months of 2026, pretax profit climbed 42% to £6.63 billion from £4.68 billion, while underlying pretax profit was £6.58 billion, up from £4.85 billion. EPS was 7.6p, up from 4.8p.

Underlying net interest income increased 10% to £11.08 billion in the nine months from £10.11 billion a year before. The nine-month banking net interest margin rose to 3.21% from 3.04%.

Lloyds maintained its full-year guidance, expecting underlying net interest income of more than £14.9 billion, a cost-to-income ratio below 50%, return on tangible equity above 16%, and capital generation exceeding 200 basis points.

The Edinburgh-based bank said it plans to pay down its common equity tier one capital ratio to around 13.0% by year-end from 13.3% at September 30.

Lloyds made no comment in its earnings statement about the increase in the bank levy surcharge that was announced in the UK government budget on Wednesday. The levy was raised to 6% from 3%, as expected.

Shore kept its 'sell' rating on Lloyds shares, saying its analysts "see little in today's results alone to justify a material increase to our forecasts or 93p target price and continue to view the valuation as demanding."

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