Lloyds Banking Group pre tax profits are down on last year

For Lloyds Banking Group, there has been a reported 33% drop in statuary pre-tax profits for the first quarter of 2014. The bank said that on an underlying basis – excluding costs and write downs- profits rose 22% to £1.8bn for the first quarter of 2014, with no further mis-selling provisions booked in the quarter.

The bottom line statutory profit figure after all costs were accounted for was £1.36bn which was down 33% on the £2.04 billion booked for the first quarter of 2013.

In a repeat of the first quarter of 2013, Lloyds has made no further provision for mis-sold financial products like Payment Protection Insurance (PPI) and interest rate swaps.

At the year end, the bank set aside a further £1.8 billion to cover PPI compensation costs, taking its total provisions to date to nearly £10bn, having set aside a further £750 million at the end of the third quarter of 2013.

The Group finance director, George Culmer, said the bank still has £2.3 billion in reserves to address PPI claims, but when asked if further sums would be set aside, he said “I am never going to say never on PPI”.

Lloyds, which remains 25% state owned, said it lent £9.8 billion to mortgage borrowers in the first quarter, including £416 million through the government – backed Help to Buy scheme.

Lloyds said it ‘continues to lead the market’ in its utilisation of another government backed lending drive, and at the end of the first quarter of 2014 Lloyds said “Our current eligible balances under the scheme stood at approximately £91 billion”.

Chief executive Antonio Horta- Osario said “Following the launch of TSB bank in the second half of 2013, we have continued to prepare for an IPO (initial public offering) of the TSB business. We are now well placed, subject to final regulatory approval and market conditions, to launch the IPO in the summer of this year.”

Posted on Thu 01 May 2014