Lloyds sees profits hit £2bn following economic rebound

Lloyds Banking Group has reported better than expected third quarter profits as Britain's economy rebounded from pandemic lockdowns.

Britain's biggest mortgage lender, which includes Lloyds, Halifax and Bank of Scotland, said pre-tax profits doubled over the quarter

Britain's biggest mortgage lender, which includes Lloyds, Halifax and Bank of Scotland, said pre-tax profits doubled over the quarter.

Russell Galley, managing director at Halifax, said: "I am proud that we have continued to play our part in the group's strengthened performance and deliver for our customers as the UK has continued to find its way through pandemic restrictions.

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"At the same time, we are still working behind the scenes on new ways that we can do more to be there for our customers when they need us most.

"Following the introduction of our trusted person card earlier in the year, Halifax has now also become one of the first businesses accredited by The Money and Mental Health Policy Institute as a ‘Mental Health Accessible' businesses. This is really important as we continue to take steps to make our services easier to use for vulnerable customers."

Mr Galley said that the Halifax Reward Account continues to be popular.

"We have seen the housing market fluctuate significantly in the last 18 months, which has made many of us reconsider what we value most about our homes as we've gone in and out of lockdown," he said.

"As well as our ongoing commitment to help people take their first step onto the property ladder, lending £12.8bn to first-time buyers already this year, we're also doing what we can to help people looking to make their homes more environmentally friendly and help them reduce their monthly energy bills in addition to their personal carbon footprint.

"Our analysis also found that greener homes sell for more money, as much as £40,000 more on average compared to less sustainable properties – and environmentally conscious buyers are willing to pay a ‘green premium’ for a more energy efficient abode."

The banking giant posted pre-tax profits of £2bn in the three months to September 30, up from £1bn in the same quarter in 2020. This was higher than analysts' forecasts of £1.3bn.

The increase came after the bank released more cash held aside during the pandemic, including £84m in the quarter, meaning that £740m of the £1.2bn held during the Covid-19 crisis has now been added back to the balance sheet.

Over the first nine months of the year, this equates to pre-tax profits of £5.9bn.

The UK’s biggest mortgage lender said it enjoyed a boost as it released more cash to its balance sheet held back during the pandemic.

It also enjoyed strong growth in mortgage lending, which was up £2.7bnn in the quarter. Deposits also rose.

The bank said it will see future revenues ahead of previous guidance, including return on tangible equity – a key measure in the sector – now expected to be more than 10 per cent.

Chief executive Charlie Nunn, who recently joined from HSBC, said he will be unveiling a new strategic review, although he did not go into detail.

He added: “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.”