Ahead of expectations, the £3.7bn pre-tax profit is down 6% from £3.9bn for the same period last year.

Despite the positive results, the bank has had to set aside £377 million to cover possible loan defaults due to rising interest rates.

John Moore, senior investment manager at Brewin Dolphin, commented: “Lloyds’ results have come in ahead of expectations, with rising interest rates helping its net interest margin and little sign of a deterioration in credit quality.

“However, there is a note of caution in today’s update about the effects of inflation and the impact this will have on consumer spending, with more cash being put aside to cover potential bad loans.

“Still, Lloyds is in reasonable shape to weather a tougher macro-economic environment, with its restructuring programme keeping costs in check and new services in the offing.

“But, there are still loose ends to tie up – for instance, its ownership of Scottish Widows – and investors will be looking for updates on these fronts in the next set of statements.”