Lloyds Banking Group, parent of Bank of Scotland, has posted a 12% increase in statutory pre-tax profits to £6.6 billion for 2025 to £6.7bn despite a rise in compensation for motor finance sales.
Chief executive Charlie Nunn said: “Looking ahead to 2026 and the culmination of the five year strategy we set out in 2022, our continued business momentum and strategic delivery enable us to upgrade guidance.
“The sustained strength in performance means we are well positioned for 2026 and beyond.
“Given our continued strategic execution and sustained strength in financial performance, we remain confident in meeting our 2026 commitments (including our upgraded target for return on tangible equity) and the Group’s outlook beyond 2026.
“We look forward to setting out the next phase of the Group’s strategy, beyond the current plan, in July.”
Mr Nunn said afterwards that he was expecting two interest rate cuts this year.
Today’s results showed remediation costs of £968 million, including £800m related to the potential impact of motor finance commission arrangements.
The underlying impairment charge rose from £433m to £795m, which Lloyds said was a strong and stable credit performance. The figure was broadly flat at £177 million in the fourth quarter.
It is recommending a final dividend of 2.43p a share, which increases the total for the year by 15% to 3.65p.
For 2026 the Group expects:
• Underlying net interest income of c.£14.9 billion
• Cost:income ratio of less than 50% (including operating costs of less than £9.9 billion)
• Asset quality ratio of c.25 basis points
• Return on tangible equity now of greater than 16%
• Capital generation of greater than 200 basis points
• To pay down to a CET1 ratio of c.13.0%
Santander branch closures
Santander UK is closing 44 bank branches, including those in Kirkintilloch and Stranraer, placing almost 300 jobs across the UK at risk.
The lender said its move was a continuing response to the changing needs of its customers as more people bank online.
The decision would leave it with just 244 full service branches.
Game ‘in difficulty’
Retail company Game is said to have filed a notice of intention to appoint administrators through law firm RPC.
It would be the second time the chain has entered administration. In 2012 it resulted in the closure of 277 stores and over 2,000 job losses.
They were subsequently rescued by OpCapita.
In 2019 the company was acquired by Frasers Group which also owns Sports Direct and House Of Fraser. The majority of Game’s 300 stores are now housed within other shops under the brand’s umbrella.
In 2020, Frasers shut 40 stores, including Glasgow Fort.
EasyJet
Budget airline EasyJet has posted robust first-quarter sales and growing demand for summer holidays.
The headline loss widened to £93m, from £61m a year previously, due to investments in two Italian airports.
However, the airline said bookings were “building well” for the summer season and left its full-year outlook unchanged.
Kenton Jarvis, chief executive, said: “We have seen continued demand for our flights and holidays over the last quarter. Our focus on, and investment in, customer experience and punctuality is driving strong results.
“Bookings are building well for the summer season, with our largest-ever January booking period.”
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