The largest mortgage lender in the U.K. – Lloyds Banking Group Plc – made an official statement, announcing that its profit for the first financial quarter increased by 22% due to costs and bad loans reduction. The groups underlying profit rose by more than one-fifth over the first quarter of the current financial year, marking a major improvement in performance.
Mr. Antonio Horta-Osorio, Chief Executive Officer of Lloyds, said in the company’s statement, which was cited by the Financial Times: “We made good progress in the first quarter, benefiting from our simple, low-risk, UK-focused retail and commercial banking business model.” As reported by the Wall Street Journal, Mr. Horta-Osorio added: “We are becoming a strongly capital generative business, delivering strong and sustainable returns for shareholders, and both supporting and benefiting from the U.K. economic recovery.”
According to Lloyds’ statement, its pretax profit including the one-term items increased from 1.48 to 1.8 billion pounds (3 billion dollars). This result surpassed Mar Phin’s forecast for the company’s first quarter. Mr. Phin is one of the analysts working at Keefe, Bryette and Woods. Lloyds also reported that its impairments decreased by 57% and reached 431 million pounds. According to the company’s statement, its expenses shank by 5% to 2.3 billion pounds.
Lloyds Banking Group Plc also raised its full-year net interest margin projection by 10 basis points to 2.4%. In addition, the group shared that its TSB Bank operation unit’s initial public offering is expected to be held by the end of June 2014.
Lloyds’ Chief Executive Officer Horta-Osorio also shared in the statement what the group’s targets are, cited by Bloomberg: “Our priority is now moving from reshaping and strengthening the Group, to further simplifying it and maximizing our growth potential.”
Lloyds Banking Group Plc added 0.38% to trade at 79.80 pence per share by 07:30 GMT in London, marking a one year change of +47.07%. The companys stock surged 5.49% on Thursday. According to the Financial Times, the 26 analysts offering 12 month price targets for Lloyds Banking Group Plc have a median target of 88.50 pence, with a high estimate of 115.00 pence and a low estimate of 50.00 pence. The median estimate represents a 11.32% increase from the previous close of 79.50 pence. The company is valued at 56.74 billion pounds.
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