Lloyds Banking Group will post first quarter results tomorrow following a recent mortgage lending boom sparked by the buy-to-let rush ahead of this month's stamp duty increase.
The group is expected to escape the mammoth profits' hit suffered by its investment banking rivals, with retail players helped through a challenging start to the year thanks to a surge in mortgage borrowing.
Fellow lending giant Santander said a hike in mortgage lending helped its UK first quarter profits rise 13%, but warned lending will not rise at the same pace after the Government's stamp duty increase on buy-to-let properties came into effect on April 1.
Analysts at UBS are expecting Lloyds to post first quarter underlying profits of £1.9 billion, down from £2.1 billion a year earlier.
It is forecasting bottom-line profits to dip to £1 billion from £1.2 billion a year ago - described by UBS as "unremarkable" but "stable" given the woes in the investment banking sector, which contributed to a 25% plunge in first quarter profits at rival Barclays.
As with state-backed rival RBS, Lloyds has continued to shed jobs, with 625 roles being axed and some roles going offshore to India.
The latest cuts are part of 9,000 job losses announced by the bank in 2014.
Lloyds, which will face shareholders at its AGM in mid-May, said in February that full-year statutory pre-tax profits fell 7% to £1.64 billion in 2015 after taking another £2.1 billion hit for payment protection insurance (PPI) mis-selling.
Despite this, the group revealed an £8.5 million pay package for its boss and handed out a special dividend payment to shareholders.
Lloyds said the extra charge for PPI in the fourth quarter took its total for the scandal last year to £4 billion.
But it said stripping out PPI and other one-off costs, underlying profits rose 5% to £8.1 billion.
Taxpayers still own just under 9% of the bank and government plans to sell the remaining shares in February was postponed amid turmoil in the financial markets.
The Government will only sell the shares when the price rises above the 73.6p break-even level at which Lloyds was bailed out at the height of the financial crisis.