Lloyds Banking Group Reports Q3 2024 Financial Results
Lloyds Banking Group plc announced its financial results for the third quarter of 2024, showcasing a robust financial performance despite some challenges.
Key Financial Metrics
| Financial Metric | Q3 2024 | Q2 2024 | Q3 2023 | YoY Change (%) | QoQ Change (%) |
|---|---|---|---|---|---|
| Statutory Profit After Tax | £3.8 billion | N/A | £4.3 billion | -11.6% | N/A |
| Underlying Net Interest Income | £3.2 billion | £3.154 billion | N/A | N/A | +2% |
| Banking Net Interest Margin | 2.95% | 2.93% | N/A | N/A | +0.02bps |
| Operating Costs | £7.0 billion | N/A | N/A | +5% | N/A |
The company has witnessed a decrease in statutory profit after tax, attributed to lower net interest income and increased operating costs. However, the increase in underlying net interest income and improved banking net interest margin quarter-over-quarter reflect a strong operational performance.
Revenue Performance by Segment
| Segment | First 9 Months of 2024 | Comparison to Previous Guidance (if applicable) |
|---|---|---|
| Retail | £7.4 billion growth in retail loans | In line with expectations |
| Commercial Banking | Remained broadly stable | N/A |
Retail growth has been notable, driven by motor finance and mortgage lending, while Commercial Banking performance held steady. No specific deviations from previous guidance were highlighted.
Key Developments and Operational Highlights
- Continued cost discipline with £7.0 billion in operating costs.
- Increase in UK Motor Finance due to the acquisition of Tusker and expanded fleet size.
- Completion of a share buyback with approximately 2.8 billion shares repurchased by September 2024.
- Continued growth in customer deposits, particularly in retail savings.
Executive Commentary
Charlie Nunn, Group Chief Executive, reaffirmed confidence in the company's strategic direction, emphasizing progress on their strategy of delivering higher sustainable returns. He highlighted the strength of the franchise and firm customer support as pivotal factors enabling Lloyds to deliver consistent performance amidst economic pressures.
Dividends and Share Repurchase
The company proceeded with share repurchases, substantially completing the intended buyback by the end of Q3 2024. Dividends were accrued to maintain a CET1 ratio aligned with longer-term targets.
Forward Guidance
Lloyds Banking Group has reaffirmed its guidance for 2024, projecting a banking net interest margin of over 290 basis points and expecting capital generation of around 175 basis points. They continue to foresee a strong position within targeted capital ranges.
Stock Price Movement
The company's stock experienced a minor increase of 0.31% following the earnings release, indicating modest investor confidence in the reported performance and future outlook.
In summary, Lloyds Banking Group has shown resilience in the third quarter despite subdued net interest income and rising costs. The reaffirmed guidance for 2024 underscores their confidence in maintaining strong capital and liquidity positions while navigating economic headwinds.
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