LONDON: Britain’s Lloyds Banking Group said Wednesday that net profit jumped almost 50 percent in the first quarter, as revenues were boosted by rising interest rates.

After-tax profit rallied to £1.5 billion ($1.9 billion) in the three months to March from a year earlier, it said in a results statement.

Lloyds, the final major UK bank to log first-quarter numbers, added that income swelled 18 percent to £3.4 billion on “the higher (interest) rate environment”.

Rivals Barclays, HSBC and NatWest have also posted strong earnings as higher interest rates attracted more savers and increased returns on bank loans.

Global central banks including the Bank of England have ramped up borrowing costs in a bid to tackle runaway inflation, which has been fuelled partly by rampant energy bills.

British inflation remains stubbornly above 10 percent despite a series of BoE rate hikes since late 2021.

But the increases have also prompted retail banks like Lloyds to hike their own rates on loans including mortgages, further worsening Britain’s cost-of-living crisis.

“The group has delivered a solid financial performance in the first quarter of 2023, with strong net income and capital generation, alongside resilient observed asset quality,” said Lloyds chief executive Charlie Nunn in Wednesday’s statement.

“The macroeconomic outlook remains uncertain. We know that this is challenging for many people.”

Pre-tax profit soared 26 percent to £2.3 billion in the reporting period.

Yet the lender also took an impairment charge of £243 million despite a slight improvement in the economic outlook.

Lloyds cautioned that it observed “modest” increases in the number of borrowers falling into arrears and defaulting on loans amid Britain’s cost-of-living crisis.

However, these levels remain “at or below” those witnessed before the Covid pandemic, it added.