Lloyds first quarter profits up 21 percent as bad debts fall, margins rise

The state-backed lender said on Friday it made a pretax profit before one-off items of 2.2 billion pounds ($3.4 billion) for the three months to the end of March, at the top end of expectations, according to a Reuters poll of analysts.

The bank said losses from bad debts fell 59 percent from a year ago to 177 million pounds. Asset quality this year should be better than previously indicated, it said.

Its net interest margin -- the difference between interest it gets from borrowers and what it pays to savers, a key driver of revenues -- jumped 33 basis points to 2.65 percent. It said it expects to exceed previous guidance for its NIM to be 2.55 percent this year.

Chief Executive Antonio Horta-Osorio has turned Lloyds' fortunes around, enabling Britain to sell half its 41 percent stake in the bank, which was rescued at a cost of 20 billion pounds to taxpayers during the 2007-09 financial crisis.

Lloyds announced its first dividend in February since being bailed out and the Conservative party has said it will sell a further 9 billion pounds worth of shares in the next year should it win the election, including a sale to retail investors.

Lloyds said it planned to pay a dividend for the half-year and full year for 2015, as previously guided.

The bank made a statutory profit of 1.2 billion pounds, down 11 percent on the year, after incorporating a 660 million pound charge on the sale of its challenger bank TSB to Spain's Banco de Sabadell .

(Reporting by Steve Slater; Editing by Carolyn Cohn)

WhatsAppFacebookTwitterLinkedinBeloudBluesky