Lloyds profit nearly doubled in the third quarter of 2026, with pre-tax profit of £2.3 billion reported on 29 October. Lloyds profit was up from £1.2 billion in the same period last year, when earnings were hit by potential compensation costs linked to motor finance. The result was in line with analyst forecasts and showed the benefit of higher interest rates and steady lending in mortgages and personal banking.
Lloyds is the United Kingdom largest mortgage lender, and its results are closely watched as a sign of household finances. The bank reported a return on tangible equity of 17.1% for the first half of 2026, and its third-quarter performance continued that strong run. Mortgage lending remained steady, although the housing market has slowed, with house prices flat in October according to Nationwide and down on the year according to Lloyds own house price index.
Lloyds
Bank shares fell by 5% on the day Lloyds results were published, along with HSBC, after the Budget confirmed a rise in the bank surcharge to 6%. The fall was part of a wider sell-off in bank shares, with NatWest down 8% on flat profits. Over the past month to 30 October, Lloyds shares were down 11%, HSBC down 14% and NatWest down 16%, as investors worried about higher taxes and higher rates.
The Budget had confirmed that the surcharge would double to 6% from January for 15 months, rather than rising to 8% as some reports had suggested. Domestically focused banks Lloyds and NatWest had risen on Budget day, when the damage was seen as less severe than feared, but the lack of guidance upgrades in the results updates pushed shares down again. Lenders were marked down on concerns about higher interest rates and the outlook for lending.
For customers, Lloyds results show a bank in strong financial health, with capital to lend and to pay dividends. The bank paid an interim dividend of 1.58p, up 30% on the year, in its half-year results. For the wider economy, the result suggests households are still repaying mortgages and managing debts, even as higher rates add to monthly payments. The next test will be the full-year results in early 2027.
Source: Investors’ Chronicle
