Lloyds Banking Q1 Profit Surges

Lloyds Banking Group plc. (LLOY.L,LYG) reported that its first-quarter statutory profit after tax surged to 1.40 billion pounds from 480 million pounds in the previous year.

Statutory profit before tax for the first quarter of 2021 also surged to 1.90 billion pounds from the previous year's 74 million pounds benefiting from solid business momentum and a net impairment credit as a result of the UK's improved economic outlook.

Underlying profit was 2.07 billion pounds, compared to 558 million pounds last year, reflecting both the improved impairment outcome and lower total costs, partially offset by lower net income.

Net income was 3.7 billion pounds, down 7 per cent year on year, with higher average interest-earning assets of 439 billion pounds, net interest margin of 2.49 per cent and other income of 1.1 billion pounds.

Net interest income of 2.68 billion pounds was down 9 per cent year on year, impacted by a reduced banking net interest margin of 2.49 per cent, reflecting the lower rate environment.

The Group continues to expect operating costs for 2021 to reduce to 7.5 billion pounds including net coronavirus-related costs and compensation headwinds.

The Group now expects the net interest margin for 2021 to be in excess of 245 basis points.

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