Lloyds underlying profit declines 6% in first quarter despite lower operating costs
Dan Cancian
Lloyds Bank previously revealed plans to cut approximately 600 jobs across a number of divisions
Reuters
Lloyds Banking Group reported a decline in underlying profit
in the first three months of the year, but said the performance over
the period was "robust" and reiterated its full-year guidance.
In the three months to 31 March, the FTSE 100 lender posted a
6% year-on-year decline in underlying profit to £2.05bn ($2.99bn,
€2.63bn), although the group said the figure was in line with
expectations once its TSB business was stripped out.
A 1% reduction in income was offset by lower operating costs
and reduced impairment charges, which fell 2% and 6% respectively.
However, statutory profit before tax plunged 46%
from the corresponding period in 2015 to £654m following an expected
£790m charge relating to the redemption of electronic communication
networks (ECNs) in the first quarter.
The underlying return on required equity declined from 16% to 13.8%,
largely because of the disposal of TSB and a higher assumed underlying
tax rate, the bank said.
"In the first three months of this year we have continued to make good progress,
delivering a robust financial performance and maintaining our strong
balance sheet," said group chief executive António Horta-Osório.
"These results demonstrate the strength of our differentiated,
simple, low-risk business model and reflect our ability to actively
respond to the challenging operating environment."
Total loans and advances to customers amounted to £457bn at the end
of the first quarter, a £2bn increase from the previous quarter, with
increased lending to small and medium businesses and other commercial
clients, while
customer deposits were £1bn higher than in the previous three months to £419bn
.
The FTSE 100 bank, which earlier this month unveiled plans to cut approximately 600 jobs
across a number of divisions and offshore its IT operations to India,
said the second stage of its cost-reduction programme has delivered
£495m of annual run-rate savings, ahead of plan and on track to deliver
£1bn savings by the end of 2017.
Lloyds underlying profit declines 6% in first quarter despite lower operating costs
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