Banking calm before storm
PROFITABLE LLOYDS FEARS BAD DEBTS
BANKING giant Lloyds defied the gloom of the cost of living crisis by reporting forecast-busting quarterly results yesterday.
But the group warned customers were beginning to cut back on spending, with 1.2 million subscriptions cancelled for services such as streaming and gym memberships since last summer.
Lloyds announced profits of £1.6billion for the first three months of 2021, down from £1.9bn last year but smashing a £1.4bn figure predicted by analysts.
Meanwhile the group said it had set aside nearly £180million for loans it believes could turn sour if borrowers can’t meet repayments.
William Chalmers, Lloyds’ chief financial officer, said: “We are seeing one or two signs of customers responding to the inflationary environment.” He insisted the impact of rising prices had been “benign” so far, and added the bank was contacting customers to offer help if needed. “We remain vigilant,” he added. Lenders generally have benefited from a rise in interest rates set by central banks. Lloyds chief executive Charlie Nunn said: “While we are seeing continued recovery from the coronavirus pandemic, the outlook for the UK economy remains uncertain, particularly with regards to the persistency and impact of higher inflation.” Russ Mould, investment director at City firm AJ Bell, added: “It’s serious when a bank talks about proactively contacting customers that could be facing financial troubles to offer help and guidance.”