Lloyds beats profit estimates as consumers prove resilient and Bank of England holds rates

Lloyds Banking Group has outperformed profit expectations, buoyed by a lower-than-anticipated provision for doubtful loans and signs of rising consumer confidence.

The banking conglomerate, which includes Lloyds Bank, Halifax, and Bank of Scotland, disclosed a pretax profit of £1.82 billion for the period from July to September, slightly down from £1.86 billion in the same period last year, as reported by City AM.

Analysts had predicted a third-quarter profit of £1.62 billion, according to a consensus compiled by the company.

The FTSE 100-listed group enhanced its profits by earmarking considerably less for bad loans than analysts had forecasted. It recorded an impairment charge of £172 million, an increase from £44 million in the previous quarter but substantially below the £419 million logged a year earlier.

Expectations were set for Lloyds to allocate a £271 million impairment.

As a barometer for the UK's economic health with over 27 million customers, Lloyds' financial performance is closely watched. "We have continued to see increased confidence in customer activity," said William Chalmers, the Chief Financial Officer, during a press briefing.

Chalmers attributed the "relatively low" impairment to a debt sale within the quarter and noted the resilience of their customers. "Our customers continue to prove resilient, without a doubt," he remarked.

Highlighting positive economic indicators, the group observed a five percent uptick in non-essential spending by customers throughout the first nine months of 2024. Additionally, there was a notable 20 percent reduction in average energy bill expenditures.

In terms of deposits, Lloyds reported a £1 billion increase, reaching £475.7 billion in the third quarter.

The company's stock price experienced a 1.7 per cent increase in early trading on Wednesday. So far this year, its share