Dan Coatsworth, head of markets at AJ Bell, said: “On paper, Lloyds’ first-quarter results smashed it out of the park but caution about the immediate outlook helped keep a lid on investor enthusiasm.
“It saw a big jump in profit and an increase in income guidance for the full year.
“However, Lloyds is wary about the impact of the Iran war on the UK economy and the impact that could have on its customers. This raises the risk of more bad debts.
“Provisions relating to motor finance mis-selling were unchanged.
“A legal challenge by Consumer Voice could delay or even alter the terms of the FCA-backed redress scheme.
“Lloyds would love to put this whole episode in the rearview mirror and move on, so it will hope for a near-term resolution on motor finance.
“Meanwhile, the plan pursued under CEO Charlie Nunn of boosting Lloyds’ footprint in business activities which aren’t as exposed to the interest rate cycle continues, with further expansion in areas like wealth management and insurance.
“With this strategic move already advanced, investors will be looking for the next leg of Lloyds’ growth strategy, with Nunn teeing up an update alongside the company’s first half results this summer.”
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