Lloyds turnaround continues, with underlying profits up and bad debts down amid a positive outlook for the UK economy. Kirsty Basset reports.
A healthy result for Britain's biggest retail bank Lloyds. An underlying pre-tax first quarter profit of 2.2 billion pounds. That's at the top of the forecast range - and up 21 per cent on a year ago. Results were boosted by a drop in bad debts, which fell 59 per cent. Reuters BreakingViews columnist Dominic Elliott says profit margins are up. (SOUNDBITE) (ENGLISH) REUTERS BREAKINGVIEWS COLUMNIST DOMINIC ELLIOTT SAYING: "The difference between the interest payments that Lloyds receives and those that they pay out - that's improved a lot, and that's a pretty good indicator of future revenue growth as well. And you've seen that largely increase because of an improvement in wholesale funding costs for Lloyds, but also because they are running off some assets that were pretty inefficient." The state-backed lender's fortunes continue to turn around under CEO Antonio Horta-Osorio. He says the results are a reflection of a healthy UK economy - and is confident next week's election won't change that. He's expecting growth in the UK economy of between 2.5 and 3 per cent. (SOUNDBITE) (ENGLISH) REUTERS BREAKING VIEWS COLUMNIST DOMINIC ELLIOTT SAYING: "That's pretty impressive, if of course we get to that. So they're pretty positive about the way the UK's going and I think that if that comes to pass, it'll be good news for all UK banks." Lloyds was rescued at a cost of 20 billion pounds during the financial crisis. It announced its first dividend since being bailed out in February. Shares rose 3 per cent on the results.