Lloyds income falls as depositors look for better savings deals

Lloyds Banking Group (LLOY) seemed to stumble at the second furlong after a 9 per cent fall in net income led to lower reported quarterly profits before tax of £1.62bn, down from £2.26bn at this point last year. What has become clear as the year progresses is that depositors are actively looking for better deals on their savings, with deposit churn seen particularly from Lloyds’ corporate clients.

Customer deposits of £469bn decreased by £2.2bn, with growth in retail deposits of £1.3bn offset by a reduction in commercial banking of £3.5bn. Loans and advances to customers reduced to £449bn, primarily due to expected reductions in UK mortgage balances, given the refinancing of the higher liabilities towards the end of last year.