Lloyds Banking Group has reported a 28% drop in pre-tax profits in the first quarter, down from £2.3bn to £2.6bn year on year.

Mortgage lending was down by 1% from just under £308bn in Q1 last year to around £305bn in the first quarter of this year. 

The bank says the dip in lending was expected due to high levels of remortgaging in the final quarter of 2023.

Its profits were impacted by the new Bank of England levy and by the cost of severance packages for employees that have been made redundant.

In a call with reporters earlier today, chief financial officer William Chalmers said he expects pressures on margins “to ease through 2024”, according to Reuters.

He said the bank was anticipating “a more benign economic outlook going forward” and was still expecting three cuts to the Bank of England base rate this year.