Lloyds (LLOY.L) reported a 28% drop in its first quarter profits as the lender was hit by stronger competition in the mortgage market. The bank announced a pre-tax profit for the first quarter of £1.6bn ($1.99bn), down from £2.3bn a year ago. It came in slightly below forecasts with analysts expecting a quarterly profit of £1.7bn. Lloyds said the decline was driven by lower net interest income — the difference between what it generates from loans and pays out for deposits — and higher business costs. Net interest margin, a closely-watched measure of profitability, edged down to 2.95% from 2.98% at the end of the fourth quarter and 3.22% a year ago. Underlying net interest income fell 10% to £3.2bn. Its margins have narrowed into 2024 amid intense competition for mortgages and deposits, and the expectation that rate-setters will make multiple cuts this year. Furthermore, earnings per share decreased by 0.6 pence to 1.7 pence, and the CET1 ratio reached 13.9%. Operating costs jumped 11% to £2.4bn. Read more: Best UK banks for online and mobile security revealed Charlie Nunn, group chief executive, said: "The group is continuing to deliver in line with expectations in the first quarter of 2024,...