They posted a 28 per cent drop in pre-tax profits to £1.6billion in the three months of the year, compared with £2.2billion a year ago.

There was an impairment charge of £57 million compared to loans of £448 billion.

Lloyds said its margins had been hit “mainly within UK mortgages” amid heightened competition between lenders to offer squeezed buyers better deals.

There were less mortgage lenders due to customers being squeezed amid the ongoing cost of living crisis.

Lloyds reassured the City by saying results this year would be in line with expectations, though profit margins will fall to 2.9 per cent from 3.22 per cent.

The fall was expected as more people moved their cash into savings accounts with higher returns and mortgage rates eased because of the competition stepping up among lenders.

Charlie Nunn, the group’s chief executive, said: “The Group is continuing to deliver in line with expectations in the first quarter of 2024, with solid net income, cost discipline and strong asset quality.

“Our performance provides us with further confidence around our strategic ambitions and 2024 and 2026 guidance.

“Guided by our purpose, we are continuing to support customers and successfully execute against our strategic outcomes, as highlighted in the third of our strategic seminars last month.

“This underpins our ambition of higher, more sustainable returns that will deliver for all of our stakeholders as we continue to Help Britain Prosper.”

Last month, Lloyds Banking Group said it planned to close 53 further branches in its network.

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The group said it was closing 21 Lloyds branches, 22 Halifax branches and 10 Bank of Scotland sites.

In total, the banking group is closing 166 branches this year and 10 next year.