Lloyds bounces back to profit despite further PPI hit
Lloyds posts £288m profit in Q1 2011 but admits that this was hampered by an additional £375m PPI redress allocation.
Lloyds Banking Group announced today (1 May) that it made pre-tax profit of £288m for the first three months of 2012, a strong showing compared to the same period in 2011 when the group posted a £3.47bn loss.
However, the partly state-owned bank was hampered by an extra £375m charge to cover the cost of compensating customers for mis-sold payment protection insurance.
It had already set aside £3.2bn for the purpose last year. However, it said the increase was necessary due to the increased volume of complaints.
The bank said it has continued to focus on supporting the UK housing market and in particular helping first time buyers get onto the property ladder. In the first quarter it completed more than £1.3bn of new lending to over 11,500 first-time buyers, it added.
It also said that it advanced £3.25bn of gross new lending to small and medium-sized businesses in the first quarter, which it claims in on track to fulfil commitment of £12bn of gross new lending to SMEs in 2012 and positive SME net lending
The bank also said that it has made good progress with the development of new and enhanced product propositions in wealth and insurance in advance of the Retail Distribution Review implementation.
António Horta-Osório, group chief executive, said: “The group has made substantial progress against its strategic objectives in the first quarter of this year.
“Although our results reflected the subdued UK economic environment, the actions we have taken to further reduce costs, strengthen the balance sheet and reduce risk, and the additional investment we have made in our core franchise, are mitigating these effects and will position us well for future growth.”