Bank Of Baroda, Vijaya Bank, Dena Bank Share Swap Ratio Approved

• Lloyds posts £2bn profit as higher interest rates boost margins
• Mortgage costs rise sharply while households face growing pressure
• Stagflation risks emerge with slower growth and rising unemployment

Even as inflation rises, unemployment edges up and household costs continue to climb, banks are reporting stronger profits. The latest results from Lloyds Banking Group highlight this contrast, with the lender posting a quarterly pre-tax profit of £2 billion, up 33 per cent year-on-year and ahead of expectations.

The gains come largely from higher interest rates. As borrowing costs rise, banks are able to charge more on loans while keeping deposit rates relatively lower, widening their margins. Lloyds’ net interest margin rose to 3.17 per cent, up from 3.03 per cent a year earlier, reflecting this shift. The bank also upgraded its outlook for net interest income to more than £14.9 billion, pointing to sustained higher rates.