Lloyds Banking Group reports first quarter profit of £ 2.1 billion

Lloyds Banking Group reported underlying profit of £ 2.1bn in the first quarter, up from £ 558m a year ago, helped by the write-off of bad loan losses of £ 459m previously expected.

First quarter figures showed a net depreciation credit of £ 323million, compared to a charge of £ 1.4 billion in the first quarter of last year.

Revenue fell 7% year-on-year to £ 3.7 billion, although it was better than analysts had predicted.

The group said it now expects the UK economy to rebound with 5% growth in 2021, up from previous expectations of a 3% expansion, when it forecast the unemployment would peak at 7%, not 8%.

Its outlook for the year as a whole has also been revised upwards on a series of measures, in particular the net interest margin.

Lloyds had its best month for mortgages since 2008 in March, as the housing market was boosted in part by the stamp duty holiday. Its mortgage portfolio grew 6% year-on-year to reach £ 283.3 billion.

The group now expects the mortgage market to grow at a slower pace after the stamp duty hiatus ends in June, although it added that the housing market is expected to continue to be supported by changes in prices. the demand of buyers due to the pandemic.

Lloyds reiterated that it will “resume its progressive and sustainable ordinary dividend policy with a dividend above 2020” and hopes that regulators will return control of the policy to boards of directors for the interim payment.

Managing Director Antonio Horta-Osorio will step down later this month to become Chairman of Credit Suisse, replaced by Charlie Nunn, former global head of wealth management and personal banking at HSBC.

Horta-Osorio said: “The coronavirus pandemic continues to have a significant impact on people, businesses and communities in the UK and around the world.

“The group remains absolutely focused on supporting its customers and helping Britain recover from the financial effects of the pandemic.

“The long-term transformation of the group has positioned the company well to meet the challenges of the pandemic. ”

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