Lloyds warns profitability to fall as low interest rates take toll
Lloyds Banking Group has warned its profitability will drop in the next year despite signs of an improvement in the UK’s economic outlook, as competition in the mortgage market and low interest rates weigh on revenues.
William Chalmers, chief financial officer, said: “There’s no question that the environment presents its challenges, principally in the context of the low interest rate environment. But we do see our business model being the right one.”
Lloyds said it would offer 2 billion pounds of finance with no fees to affected small firms that have a turnover of up to 25 million pounds. The funding is part of its expected 18 billion pounds of business lending this year.