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Lending giant Lloyds Banking Group has reported a fall in profits as it set aside more money for bad debts amid economic uncertainty due to the global trade tariff war.
The group reported pre-tax profits of £1.52 billion for the three months to the end of March, down 7% on the £1.63 billion reported a year ago.
It set aside £309 million for impairment charges, up from £57 million a year ago, including £100 million for potential borrower defaults as the tariff hikes unveiled by US President Donald Trump have led to worries over the worldwide economic outlook.
The group said: “Initial non-UK tariffs announced in the first few days of April and the immediate market response were larger than expected.”
But on its forecast for the UK outlook, it said it is predicting a “slow expansion in gross domestic product and a modest rise in the unemployment rate alongside small gains in residential and commercial property prices”.
“Inflationary pressures remain persistent, but gradual cuts in UK Bank Rate are expected to continue during 2025,” it added.
The group stuck by its guidance for full-year results in the face of “recent market volatility and economic uncertainty”.
Charlie Nunn, group chief executive of Lloyds, said: “In the first quarter of 2025, the group delivered sustained strength in financial performance.
“We remain confident in the outlook for Lloyds Banking Group and in our 2025 and 2026 guidance.”
English (US) ·