Lloyds profit flat as it warns on Brexit impact
Lloyds Banking Group has reported flat profits for the start of the year as it swallowed £565m in one-off costs and warned Brexit could take a further toll on the UK economy.
Britain's biggest mortgage lender said it made a pre-tax profit of £1.6bn for the first quarter, little changed on a year ago.
The group, which owns Lloyds Bank as well as Halifax Bank of Scotland, said the size of its loan book shrank 1%, including a £4.9bn decline in overall home loans assets.
However, there were improvements for car finance and small business lending.
Shares fell 2% in early trading and were 1.3% down by the close.
Chief executive Antonio Horta-Osorio said it was a "strong business performance".
He added: "While Brexit uncertainty persists, and continued uncertainty could further impact the economy, I remain confident that our unique business model… will continue to deliver superior performance and returns for our customers and shareholders."
Lloyds said underlying profits were up 8% but it was hit by a series of one-off charges.
These included £339m for "banking volatility and other items", covering the estimated cost of exiting an investment management agreement with Standard Life.
A dispute over the exit saw a tribunal ruling in March against the way the bank terminated the contract early - which analysts said could see Lloyds face a big compensation bill.
Charges also included the latest sum to be added to Lloyds's multi-billion pound total charge for compensating customers who were mis-sold payment protection insurance (PPI).
It said the £100m provision reflected "higher gross complaint volumes" as it continues to handle 13,000 complaints a week, and takes the running total to £19.525bn.
Lloyds said it also spent £126m on restructuring in the period.