Lloyds profits jump by 46% amid higher interest rate charges

But bank expects margins to drop because of tougher competition for mortgage and savings customers

Profits at Lloyds Banking Group have jumped 46% amid higher interest charges for borrowers but the lender expects margins to drop over the rest of this year on the back of tougher competition for mortgage and savings customers.

Like most of Britain’s big high street lenders, the group reported better-than-expected profits for the first three months of the year, suggesting the UK sector has broadly shrugged off the financial turmoil that has so far caused three American banks, as well as Credit Suisse, to collapse since early March.