Lloyds sees profits double

Lloyds Banking Group doubled its profit in the first three months of the year amid a “sweet spot” thanks to the economy’s resilience since the Brexit vote.

The lender, now less than 2% owned by the Government, posted better-thanexpected first-quarter figures, with pretax profits surging to £1.3 billion, up from £654 million a year earlier.

The improvement came despite the bank being forced to set aside £350m to cover mis-sold payment protection insurance claims and £100m to cover compensation for victims of fraud by former HBOS staff.

On an underlying basis, the group saw a more muted 1% rise in profits to £2.08bn, but this defied expectations for a decline.

Lloyds – a bellwether of the economy, given its position as the biggest mortgage lender – said growth remained strong and is expected to continue at a similar rate to 2016, at around 2%.

Richard Hunter of Wilson King Investment Management said the bank was in the middle of a “sweet spot” caused by the robust economy.

However, experts flagged concerns over the bank’s exposure to a downturn, with fears mounting that surging inflation caused by the Brexit-hit pound will bring an end to consumer spendingdriven growth.

The first-quarter earnings mark another step forward in the bank’s recovery story as it edges closer to being fully returned to private hands.

One analyst said Lloyds was in a “sweet spot”.