LONDON (ShareCast) - (Sharecast News) - Britain's Lloyds Bank posted better-than-expected first quarter profits on Wednesday, but warned of an uncertain economic outlook amid the cost of living crisis facing Britons.


The mortgage lender reported pre-tax profits of £1.6bn, down from £1.9bn a year ago, but beating average forecasts of £1.4bn.

Britain's largest mortgage lender attributed the fall to a £177m charge meant to protect the bank from potential defaults linked to the inflationary pressures as prices rose by 7% last month, posing a threat to credit repayments.

This was a turnaround from last year when it released £360m of the cash originally put aside for Covid-related impairments.

"Whilst we are seeing continued recovery from the coronavirus pandemic, the outlook for the UK economy remains uncertain, particularly with regards to the persistency and impact of higher inflation," said chief executive Charlie Nunn.

However, despite the economic uncertainty, Lloyds revised guidance for its return on tangible equity and net interest margin.

It now expects a banking net interest margin of 270 basis points, up from 260, and a return greater than 11%, compared with a 10% target reported in February.

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