Lloyds Banking Group PLC (LSE:LLOY) has pared back its full-year guidance after taking an £800 million charge linked to historic motor finance commission arrangements, a hit that dragged statutory profit down to £3.3 billion for the first nine months of 2025.
The bank said it now expects a return on tangible equity, a key measure of profitability, of around 12% for the year, or 14% excluding the motor finance charge.
Capital generation, another closely watched figure, is forecast at roughly 145 basis points, or 175 basis points without the third-quarter charge.
Underlying net interest income, which reflects the difference between what the bank earns on loans and pays on deposits, rose 6% to £10.1 billion.
Lloyds said the margin on its core lending book was 3.04%, up slightly from last year. Total lending increased by £18 billion to £477 billion, while customer deposits rose £14 billion to £497 billion.
Operating costs climbed 3% to £7.2 billion, reflecting inflation and investment in new technology, partly offset by efficiency savings.
The bank reported a charge of £618 million for potential loan losses, a figure it described as consistent with strong credit quality.
Charlie Nunn, group chief executive, said the bank’s performance remained “robust” despite the additional charge.
“Strong capital generation was supported by income growth, cost discipline and strong asset quality in the first nine months of 2025,” he said.
“Our strategic progress combined with this financial performance gives us confidence in our performance for the year and our 2026 guidance.”
The results also include the impact of Lloyds’ full takeover of Schroders Personal Wealth, a business supporting around £17 billion of assets under administration.
The deal, completed earlier this month, is part of the bank’s push to expand its wealth management arm.
Looking ahead, Lloyds said it expects underlying net interest income for the year to come in around £13.6 billion, with costs of roughly £9.7 billion and an asset quality ratio, the measure of potential losses on loans, of about 20 basis points.
Despite the one-off motor finance charge, Lloyds said its core capital ratio stood at 13.8% at the end of September, after accounting for dividends and buybacks.
