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TSB sell-off dents Lloyds’ profits

TSB sell-off dents Lloyds’ profits

Lloyds Banking Group has seen its statutory profit before tax fall by 11 per cent, driven by losses on the sale of TSB to Spanish bank Banco de Sabadell.

Lloyds’ first quarter results, published today (1 May 2015), revealed that the group made a £660m loss on the sale of TSB. It sold TSB in March to Banco de Sabadell in a deal worth £1.7bn.

As a result, the group’s statutory profit before tax was £1.2bn compared with £1.4bn in 2014. However, the group saw its underlying profit increase by 21 per cent to £2.18bn driven by “increased income and lower impairments”.

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Lloyds also claimed to be the “largest lender” to first-time buyers, providing one in four mortgages, and lending £2.2bn in the first three months of the year.

“Through our commitment to the commercial sector, we have supported over 23,000 business start-ups and remain the largest participant in the Funding for Lending scheme.”

It also lent £1.1bn to small and medium-sized enterprises over the last 12 months, up 4 per cent.

António Horta-Osório, group chief executive, said: “Our strong performance in the first quarter has also enabled the UK government to continue to reduce its holding in the business, further enabling our return to full private ownership.

“Following the announcement in December 2014 of a plan to carry out a measured and orderly sell down of shares over the first half of 2015, the UK government’s stake is now 20.95 per cent, less than half its original stake.”

As reported last week, the Conservative Party has pledged to offer up to £4bn of shares in Lloyds to small investors at below-market prices if they win next month’s general election.

The offer would be part of the £9bn sale of shares in the bailed-out bank that were announced in the most recent Budget. Prime minister David Cameron told the BBC it would “help us recover billions more to pay down the national debt”.

donia.o’loughlin@ft.com