London (AFP) – Britain’s Lloyds Banking Group, bailed out by the government during the global financial crisis, on Wednesday logged strong first-quarter profits on the back of the “resilient” UK economy.
Earnings after taxation, or net profits, jumped 29 percent to £1.15 billion ($1.61 billion, 1.31 billion euros) in the three months to the end of March from a year earlier, the lender said in a results statement.
LBG, which returned to full private ownership last year following its financial rescue by the UK government a decade ago, added that pre-tax profits swelled 23 percent to £1.6 billion.
The group however took another £90 million in costs for payment protection insurance (PPI) mis-selling claims, taking its total bill for the saga to an eye-watering £18.8 billion.
The London-listed financial services giant, whose brands include Lloyds, Halifax, Bank of Scotland and Scottish Widows, operates primarily in Britain with about 27 million commercial and residential customers.
“We have made a strong start to 2018,” said chief executive Antonio Hora-Osorio.
“The UK economy continues to be resilient, benefiting from low unemployment and continued GDP (gross domestic product) growth,” he added.
“Asset quality remains strong with no deterioration seen across the portfolio.
“We expect the economy to continue to perform along these lines during 2018.”
Britain’s government rescued Lloyds with £20 billion of taxpayers’ money at the height of the global financial crisis.
Lloyds Banking Group was created by a merger of Lloyds TSB and rival British lender HBOS in late 2008.
However, HBOS was saddled with toxic or high-risk property investments, and LBG subsequently received the vast state bailout.
Lloyds returned to full private ownership in May 2017 after the government had steadily offloaded its stake by returning about £21 billion to the taxpayer.
In Wednesday morning deals, Lloyds shares slid 0.35 percent to 65.89 pence, mirroring broader losses on London’s benchmark FTSE 100 stocks index.
“For the most part this is an impressive update with the potential for future growth becoming crystal clear,” said Interactive Investor analyst Richard Hunter.
“Unfortunately the share price has not kept up with developments,” he added.