Lloyds defies '˜challenging' market to double profit

Lloyds Banking Group has hailed a strong performance as it doubled bottom-line profits in the first three months of the year despite 'challenging' trading conditions.

The Bank of Scotland owner saw its first-quarter profits double. Picture: John Devlin

The lender, which is now less than 2 per cent owned by the taxpayer, posted first quarter pre-tax profits of £1.3 billion, up from £654 million a year earlier.

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On an underlying basis, the group – which owns the Bank of Scotland and Halifax brands – saw a more muted 1 per cent rise in profits to £2.08bn.

Chief executive Antonio Horta-Osorio said: “In the first three months of this year we have delivered strong financial performance.”

He added the results show the bank’s “ability to respond to a challenging operating environment”.

The vast profit improvement is helped by the absence of last year’s hefty £790m charge from its controversial move to buy back expensive bonds from investors.

Lloyds has also recently announced an extra £350m to cover mis-sold payment protection insurance (PPI) claims, while earlier this month it put aside £100m to cover compensation for victims of fraud by former HBOS staff.

Horta-Osorio said on unveiling the first quarter results that the group was determined that victims of the fraud would be “fairly, swiftly and appropriately compensated”.