Lloyds Banking Group made a pre-tax profit of £2bn in the first quarter, up from £280m a year earlier. There were no fresh charges related to the misselling of payment protection insurance (PPI), for which Lloyds has already set aside £6.8bn. The money set aside for bad loans fell. The shares jumped to a two-year high of 57p. The government, which rescued the bank and owns 39% of it, bought its stake for 63p.
What the commentators said
Five years on from the crisis, it seems "the black horse is feeling a little frisky again", said James Moore in The Independent. "Profits up, bad debts down, [and] no increase in payment protection insurance compensation, suggesting that Lloyds may finally be past the worst of that debacle." It may not be too long, then, before chief executive Antonio Horta-Osorio is running "something like a normal bank".
However, as Alex Brummer pointed out in the Daily Mail, "there are still a couple of big uncertainties" around the group. The Bank of England has yet to say how much more capital it expects Lloyds to accumulate in order to ensure it can offset possible future losses. And the bank could have to spend up to £1.6bn selling off its portfolio of TSB branches through a flotation now that the Co-op has pulled out of a deal to buy them.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Nonetheless, continued recovery could see the bank resume dividend payments within 18 months, reckoned The Daily Telegraph. That would be "the strongest sign yet that the government may finally be able to begin selling down some of its stake". And for many, said Hamish McRae in The independent, Lloyds' return to the private sector will mark the moment when "the banking crisis can be declared to have turned the corner".
-
Why CEOs deserve a pay riseOpinion The CEOs of big companies often come under fire for being grossly overpaid. But the truth, as per some economists, is the opposite. Do they merit a pay rise?
-
Europe prepares to stand alone as Trump turns on UkraineSupport for old military alliances is wavering in the US under Donald Trump. Europe’s leaders are rushing to fill the void. Simon Wilson reports
