The Courier & Advertiser (Fife Edition)
Lloyds makes progress after TSB sale
State-backed Lloyds Banking Group said it is benefiting from the improving economy after selling TSB.
It reported a better-than-expected 21% rise in underlying profits to £2.18 billion for the first quarter.
Bottom-line pre-tax profits were 11% lower at £1.21 billion, as it lost £660 million from selling TSB to the Spanish Banco de Sabadell.
Shares rose 3%. Underlying performance was boosted by growth in mortgages and small business lending as well as lower impairments from bad loans.
It also benefited from not adding any further charges to its multi-billionpound bill to cover the payment protection insurance (PPI) scandal in the first quarter, though it would not rule out more in the future.
Complaint volumes fell on the same period last year though were slightly higher than expected. Lloyds has £1.7bn left in its compensation pot to cover claims.
The fall in statutory profits came as Lloyds booked a charge slightly higher than anticipated for costs relating to the TSB sale, including a contribution for the smaller bank to build a new IT system.
Lloyds, still more than a fifth owned by the UK Government, announced a dividend for the first time in seven years in February as annual profits rose four-fold, and yesterday confirmed it intended to make both half-year and full-year payouts for 2015.
Chief executive Antonio Horta-Osorio said: “We have made a strong start to the next phase of our strategy to become the best bank for customers and shareholders, as we continue to support and benefit from UK economic growth.
“I am pleased with the continued improvement in financial strength and performance in the first quarter and expect our plan to deliver sustainable growth and improved returns.”