By Max Colchester
Lloyds Banking Group PLC said Friday that it made a net profit
of GBP913 million ($1.4 billion) for the first three months of the
year and raised a key profitability target.
The part U.K. government-owned bank said total income net of
insurance claims came to GBP4.5 billion, down from GBP4.6 billion
the year before. Net profit fell from GBP1.1 billion in the same
quarter last year, as impairments fell.
The bank said it was raising its net interest income target--the
difference between its cost of borrowing and the price it lends
at--above the original target of 2.55%.
Lloyds incurred a GBP660 million loss in relation to the spin
out of its TSB Banking Group PLC unit.
TSB was created after Lloyds was ordered by European authorities
to sell 631 branches to boost competition following its government
bailout during the financial crisis.
In March Spain's Banco de Sabadell SA entered into talks with
U.K. lender TSB about a possible GBP1.7 billion ($2.54 billion)
takeover. As part of the spin off Lloyds pledge to pay TSB a lump
sum to cover information technology costs in the event of it being
bought.
The retail focused bank has benefited from a resurgent economy
which has reduced bad loans and fueled demand for mortgages. In
February regulators gave the bank the all clear to start paying its
first dividend since its bailout in the financial crisis. On Friday
the bank said underlying profit, which strips out a number of
costs, was up 21% on last year to GBP2.2 billion.
The U.K. government, which currently owns just under a 21% stake
in the bank, has been whittling down its interest in the lender
over the past few months.
Write to Max Colchester at max.colchester@wsj.com
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