Lloyds Banking Group makes good progress

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Lloyds today reported substantial progress in the first quarter of 2013.

The bank, which is 39 per cent taxpayer-owned, reported a statutory pre-tax profit of £2.04bn, up from £280m for the same period last year.

Group chief executive António Horta-Osório said: “We are now further ahead in our plan to transform the Group, and are delivering real benefits for customers, colleagues and shareholders by investing behind our simple, UK customer-focused retail and commercial banking model.”

The bank also reported that costs were further reduced by 6 per cent with a 40 per cent reduction in impairments year-on-year.

Its core loan book returned to growth ahead of guidance – increasing by £0.6bn.

And, a further £200m cost reductions targeted in 2013 (total costs to now be reduced from £9.8bn to £9.6bn).

The bank said there was now clear evidence that the strategy launched in June 2011 is working.

Last week the bank was knocked back when the deal to sell more than 630 of its branches to the Co-op fell through.

Lloyds still plans to go ahead with the branch sale - called Project Verde - by selling them as a stand-alone bank through a stock market listing.

Underlying profits, which strip out certain one-off costs and gains, were £1.5bn for the quarter.

They exclude costs related to the planned branch sale, as well as money set aside for possible Payment Protection Insurance (PPI) payouts.