Lloyds Banking Group, the UK high street lender, reported a 42% rise in statutory pre-tax profit to £6.6 billion for the first nine months of 2026, up from £4.7 billion a year earlier.
The jump reflects a much smaller remediation charge of £61 million, compared with £912 million last year, when it included £800 million for motor finance commission arrangements.
Underlying net interest income, the gap between what the bank earns on lending and pays on deposits, rose 10% to £11.1 billion.
The banking net interest margin widened to 3.21% from 3.04%, helped by the structural hedge, which reinvests maturing long-term positions at higher interest rates.
Underlying other income grew 10% to £5.0 billion, helped by the addition of Lloyds Wealth.
Return on tangible equity, a measure of profitability, reached 17.9%, against 11.9% a year earlier.
Guidance maintained
Lloyds kept its 2026 guidance, saying net interest income should come in modestly above its £14.9 billion target.
It also expects a cost:income ratio below 50% and return on tangible equity above 16%.
Charlie Nunn, chief executive, said the group was on track and preparing to launch a new strategy, Accelerate 2030.
Costs and risks
Impairment charges, money set aside for loans that may go bad, rose to £930 million from £618 million.
That included £88 million linked to a weaker economic outlook caused by the Middle East conflict.
Operating lease depreciation on the bank's car leasing fleet rose 17% to £1.3 billion, partly because of lower used car prices.
Lloyds booked no new motor finance charges and said its existing provision remains its best estimate.
However, the Financial Conduct Authority's redress scheme has been delayed, with an Upper Tribunal hearing on four challenges due in the second half of February 2027.
The common equity tier 1 ratio, a measure of financial strength, was 13.3%, against a target of about 13.0% by the end of 2026.
Tangible net assets per share fell 1.6 pence to 55.4 pence, as capital distributions and higher long-term rates outweighed profit.
