By Sarah Taaffe-Maguire, business and economics reporter
Profits at the UK’s biggest mortgage lender continued to be boosted by expensive borrowing.
Despite interest rates dropping twice in 2024, Lloyds Banking Group said they saw increased income from loans and savings
In the face of affordability pressure caused by higher interest rates, mortgage lending grew by £6.1bn.
Overall, the lender’s profits reached £5.97bn, a 20% drop from a year earlier and below analyst expectations.
It has set aside even more money, £700m, than last year to deal with any charges for misselling car loans, after lenders were accused of paying commissions to car dealers without customer consent.
A judge will rule on this issue in April, having rejected Chancellor Rachel Reeves’ attempt to intervene and shield lenders from payouts.
In addition to the £3.6bn in payouts shareholders got through 2024, there was more good news as Lloyd’s share rose nearly 3% in value.
But the biggest riser of the UK’s benchmark index, the FTSE 100, was Centrica, the owner of British Gas and Irish supplier Bord Gais.
Its share price is up a whopping 10%, as it announced it would buy back another £500m of shares.
Profits, however, fell to £2.3bn from £3.5bn a year earlier as global energy prices fell from the 2022 highs after Russia invaded Ukraine.
The outlook for 2025 was unclear as weather, energy prices, regulation and government policies were uncertain, Centrica said.
Despite the strong Lloyds and Centrica rises, the FTSE 100 index of most valuable companies on the London Stock Exchange fell 0.33%.
There’s been little change in sterling values. The pound still buys €1.20 and $1.20, in line with levels this week.
Oil still remains cheaper than most of 2024. A barrel of Brent crude, the standard-setting price, costs $76.18, below the $80 typical price seen last year.
