LONDON (Reuters) - Britain's biggest mortgage lender Lloyds Banking Group reported pre-tax profit of 1.6 billion pounds in the first quarter on Wednesday, just missing analyst expectations of 1.82 billion pounds.
While falling short of the average of analysts forecasts based on Thomson Reuters data, the bank's profits grew by 23 percent compared with the 1.3 billion pounds it posted in the same period last year.
Chief Executive Antonio Horta-Osorio said the results demonstrated the strength of the bank's business model, and maintained his upbeat tone on the UK economy.
"The UK economy continues to be resilient, benefiting from low unemployment and continued GDP growth," he said, adding the bank had seen no deterioration in asset quality and expected this to continue throughout 2018.
Lloyds' exposure to consumers' finances via mortgages and unsecured lending like credit cards make it a bellwether for the British economy.
However, loan impairments rose to 258 million pounds over the first three months of 2018, compared with the 127 million pounds seen in the same period last year.
The bank, which laid out a fresh three-year strategy in February, also reported a common equity tier one capital ratio of 14.4 percent and took another 90 million pounds in provisions to resolve issues related to its mis-selling of payment protection insurance.
(Reporting by Emma Rumney and Lawrence White, editing by Sinead Cruise)