This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/business/2013/apr/30/lloyds-profit-rise-bad-debts-fall

The article has changed 6 times. There is an RSS feed of changes available.

Version 3 Version 4
Lloyds profits surge to £2bn as bad debts fall Lloyds profits surge to £2bn as bad debts fall
(about 3 hours later)
The chief executive of Lloyds Banking Group has said the bailed-out bank is making "substantial progress" in its attempts to return to the private sector, as it reported a sharp rise in first-quarter profits to £2bn.The chief executive of Lloyds Banking Group has said the bailed-out bank is making "substantial progress" in its attempts to return to the private sector, as it reported a sharp rise in first-quarter profits to £2bn.
Despite the setback caused by the collapse of talks with Co-op to sell 632 branches, on Tuesday António Horta-Osório pointed to a 40% fall in provisions on bad loans and increasing margins for the rise in profits from £288m a year ago. Despite last week's setback, when talks to sell 632 branches to the Co-op collapsed, on Tuesday António Horta-Osório pointed to a 40% fall in provisions for bad loans and higher margins for the rise in profits from £288m a year ago.
The absence of an additional charge to compensate customers mis-sold payment protection insurance, for which the bank has set aside £5.8bn, also helped bolster profits, but the headline figure of £2bn includes £1.1bn of asset sales and other volatile items, including the sale of government bonds on which the bank made a £776m profit. The absence of an additional charge to compensate customers mis-sold payment protection insurance, for which the bank has set aside £5.8bn, also helped bolster profits, and the headline figure of £2bn includes £1.1bn of asset sales and other volatile items, including the sale of government bonds on which the bank made a £776m profit.
Before the government is able to kick off any sale of its 39% stake in the bank Horta-Osório is expected to need to give clarity on when it can resume paying a dividend, its first since the 2008 financial crisis.Before the government is able to kick off any sale of its 39% stake in the bank Horta-Osório is expected to need to give clarity on when it can resume paying a dividend, its first since the 2008 financial crisis.
Its shares were the biggest risers in the FTSE 100, gaining nearly 5% in early trading to 56.2p. This remains well below the 73.6p average price at which the taxpayer bought its 39% stake in the bank, although Horta-Osório has had part of his £1.5m bonus linked to the government selling off a third of its stake at prices above the lower price of 61p.Its shares were the biggest risers in the FTSE 100, gaining nearly 5% in early trading to 56.2p. This remains well below the 73.6p average price at which the taxpayer bought its 39% stake in the bank, although Horta-Osório has had part of his £1.5m bonus linked to the government selling off a third of its stake at prices above the lower price of 61p.
Separating the 632 branches for sale was proving more complex that the integration of HBOS, the bank said, as it admitted the costs of breaking out the branches would reach £1.3bn.Separating the 632 branches for sale was proving more complex that the integration of HBOS, the bank said, as it admitted the costs of breaking out the branches would reach £1.3bn.
Brussels demanded the branches were sold by November 2013 in return for the £20bn taxpayer bailout, although the breakdown in the Co-op talks means that deadline will be breached.Brussels demanded the branches were sold by November 2013 in return for the £20bn taxpayer bailout, although the breakdown in the Co-op talks means that deadline will be breached.
A stock market flotation of the branches, which will be rebranded TSB on the high street by September, is expected next year.A stock market flotation of the branches, which will be rebranded TSB on the high street by September, is expected next year.
The finance director, George Culmer, said a number of hurdles remained in the way to providing clarity on the payments to shareholders, including the implementation of the ringfence recommended by the Independent Commission on Banking and European directives on capital. Lloyds's finance director, George Culmer, said a number of hurdles remained before clarity can be provided on the payments to shareholders, including the implementation of the ringfence recommended by the Independent Commission on Banking and European directives on capital.
He said the bank was also awaiting the outcome of discussions with the new Prudential Regulation Authority, spun out of the Financial Services Authority to regulate banks, over the size of any capital shortfall it may have.He said the bank was also awaiting the outcome of discussions with the new Prudential Regulation Authority, spun out of the Financial Services Authority to regulate banks, over the size of any capital shortfall it may have.
These discussions follow the pronouncement by the Bank of England that the industry has a £25bn capital shortfall that needs to be plugged. Culmer said he was unsure when Lloyds would know the outcome about its capital position.These discussions follow the pronouncement by the Bank of England that the industry has a £25bn capital shortfall that needs to be plugged. Culmer said he was unsure when Lloyds would know the outcome about its capital position.
The bank's closely watched measure of capital – the core tier-one capital ratio – rose to 12.5% from 12% by the end of the first quarter. "Given our strongly capital generative core business and continued progress in increasing capital and reducing risk through non-core asset disposals, we continue to be confident in our capital position," the bank said. The bank's closely watched measure of capital – the core tier one capital ratio – rose to 12.5% from 12% by the end of the first quarter. "Given our strongly capital generative core business and continued progress in increasing capital and reducing risk through non-core asset disposals, we continue to be confident in our capital position," the bank said.
Some 8,800 jobs have been cut by Horta-Osório since he took the helm in March 2011, when he announced a cost-reduction programme that would lead to 15,000 cuts in total. These come on top of the 30,000 lost as a result of the rescue takeover of Lloyds during the 2008 banking crisis.Some 8,800 jobs have been cut by Horta-Osório since he took the helm in March 2011, when he announced a cost-reduction programme that would lead to 15,000 cuts in total. These come on top of the 30,000 lost as a result of the rescue takeover of Lloyds during the 2008 banking crisis.
The volume of PPI complaints has started to fall but is still running at 15,000 a week. The lack of fresh provisions for PPI prompted the claims management company Emcas to warn the bank was "vastly underestimating and downplaying the extent of the PPI mis-selling crisis". Just over 40% of the claims its receives are from Lloyds customers.
The bank also announced that the Irish regulation head Matthew Elderfield was joining in October as director of conduct and compliance. The bank also announced that the Irish regulation head, Matthew Elderfield, would be joining in October as director of conduct and compliance.