Lloyds profits fall as it prepares for mortgage arrears jump amid rising rates

Bank says higher interest rates and cost of living pressures are ‘proving challenging’ for people and firms

Profits for Lloyds Banking Group tumbled 29% in the three months to June, as it prepared for an increase in customers falling behind on costly loan and mortgage payments because of rising interest rates.

Lloyds, which is the UK’s largest mortgage lender and owns Halifax, said pre-tax profits fell to £1.6bn in the second quarter. That marked a drop from £2.3bn a year earlier, and was slightly slower than average analyst estimates for £1.7bn.