Lloyds Banking Group's pretax profit was all but wiped out in the first quarter, after it became the latest lender to be hobbled by provisions against expected bad loans due to the coronavirus pandemic. 

The UK's biggest domestic bank today reported pre-tax profits of £74m, down from £1.6 billion the previous year, hit by a £1.4 billion loan impairments charge. 

The figure was sharply below the £863m average of analysts' forecasts compiled by the bank. 

Lloyds is viewed as a bellwether for the British economy, as the country's largest provider of home loans and one of its biggest backers of businesses. 

It abandoned forecasts on various performance metrics it set out in February, which included an increase its return on equity to 12 to 13%, saying that guidance was no longer appropriate given the harsher environment. 

"We expect the group will also experience further impairments, both in existing and new lending books, particularly if economic expectations deteriorate further from the base case," the bank said.

It added that the double base-rate cuts in March would also impact margins adversely. 

Lloyds' results would have been even worse but for a tax credit of £406m in the period, which the bank said was due to lower profits and an uplift from deferred tax assets.

The UK banks have faced heavy criticism for their slow progress in supplying £330 billion worth of state-guaranteed loans to businesses buckling under the pressure of a near-shutdown in the UK economy. 

Lloyds said it had provided 880,000 loan repayment holidays across all its product lines and issued 3,752 loans with an aggregated value of £500m via the Coronavirus Business Interruption Loan Scheme (CBILS). 

But it is still lagging behind rivals RBS, HSBC and Barclays, despite being Britain's biggest provider of loans to small companies.

Lloyds has a 24% market share of relationships with small business borrowers, data from business insights provider RFi Group sent to Reuters shows. 

Rival RBS, with a 14% share, has provided £1.4 billion of CBILS loans, nearly three times the value of Lloyds. 

Lloyds did however report a £2.7 billion increase in loans and advances to £443.1 billion over the period, which it said was driven by drawdowns of existing corporate debt facilities. 

HSBC and Barclays have also set aside billions of pounds to cover an expected spike in bad loans due to the coronavirus outbreak, with state-backed RBS expected to follow suit tomorrow.