Lloyds Bank has recorded a decline in profits for the first half of the year.

Pre-tax profits were down from £3.9 billion in the first six months of 2021, to £3.7 billion during the same period of this year.

Post-tax profits were down 27 per cent to £2.8 billion, which the bank said was due to £377 million set aside for loan defaults.

This compares to a net credit of £734 million in the first half of last year.

Lloyds said that the impairment charge had been driven by additional risks from a higher inflation and interest rates.

But the bank assured shareholders that are currently “low levels” of customers in arrears, which remain below pre-pandemic levels.

It also increased its guidance for the year, expecting its net interest margin to be greater than 280 basis points – a hike of 10 points compared to its April estimate.

“Our strong financial performance demonstrates the resilience of our business model and customer relationships, and has enabled us to enhance guidance for 2022,” said Charlie Nunn, group chief executive. “Just as we remain well placed to withstand the current macroeconomic uncertainty and continue to generate significant capital for our shareholders, so too do we remain committed to maintaining the support we give to our customers every day as they adapt to the challenges they face."

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