Lloyds posts largest annual profit in over a decade

Bank plans to invest more than £3bn in technology and headcount as part of a three-year strategic plan

Chief executive António Horta-Osório described the year as 'landmark' (iStock)

Lloyds Banking Group has posted its largest annual pre-tax profit in over a decade, but narrowly failed to meet analyst expectations.

The lender on Wednesday said that pre-tax profit for 2017 had come in at £5.3bn, marking a 24 per cent increase on the previous year. That was the highest figure since 2006 but still undershot the £5.73bn analysts polled by Reuters had pencilled in.

Chief executive António Horta-Osório described the year as “landmark” and said that the group had “made significant strategic progress and returned to full private ownership”.

He attributed the success to the “hard work of all our people” and said that Lloyds was “well prepared to succeed in a digital world”.

Lloyds also announced that it plans to invest more than £3bn in technology and headcount to cut costs and enhance customer experience as part of a three-year strategic plan. Additionally, it said that it also intends to buy back £1bn worth of shares.

Mr Horta-Osório has been instrumental in returning Lloyds to profitability during his seven-year tenure so far, but the bank’s fortunes remain closely linked to the health of the UK economy, especially as it is Britain’s biggest mortgage lender.

On Brexit, the CEO struck a cautiously optimistic tone.

“Although the precise nature of the UK’s future relationship with Europe remains unclear and the economic outlook is therefore uncertain, the economy has been resilient with low unemployment, stable house prices, record employment and GDP growth of 1.8 per cent,” he said.

The bank also said that its “portfolios are well positioned against an uncertain economic outlook and potential market volatility”.