LONDON
Britain’s state-rescued Lloyds Banking Group said Thursday that first quarter net profit jumped 72 per cent as exceptional costs from a year earlier were not repeated.
Lloyds, which has been returned almost fully to the private sector after a state bailout during the 2008 global financial crisis, added its performance was “strong” despite challenging trade.
Profit after tax soared to £871 million (Dh4.1 billion, $1.12 billion) in the first three months of the year, compared with £506 million in the same period of 2016, LBG said in a results statement.
However, the year-earlier figure was weighed down by a vast £790-million charge linked to the repurchasing of bonds launched after the global financial crisis.
Underlying pre-tax profits meanwhile grew one per cent to just under £2.1 billion in the first quarter of 2017.
“In the first three months of this year we have delivered strong financial performance with increased underlying profit, a significant improvement in statutory profit and returns, and strong capital generation,” said Chief Executive Antonio Horta-Osorio.
“These results continue to demonstrate the strength of our customer focused, simple and low risk business model and our ability to respond to a challenging operating environment.”
He added: “The UK economy continues to benefit from low unemployment and reduced levels of indebtedness, and asset quality remains strong and is stable across the portfolio.”
Lloyds recently announced that it took another £350 million charge to cover compensation for mis-sold payment protection insurance (PPI) claims.
The British government bailed out Lloyds at the height of the financial crisis at a cost of £20.3 billion, handing the state a 43-percent stake in the bank.
However, it has since slashed its holding to below two per cent following numerous share sales.
British finance minister Philip Hammond revealed last week that the Treasury has now recovered all the money used to bail out Lloyds. It expects to sell the remaining share in the coming weeks.
However, the government still owns 73 per cent of Royal Bank of Scotland, which was rescued with £45.5 billion of taxpayers’ cash during the crisis. That was the world’s biggest banking bailout.
