Lloyds profits down in Q1

The group, which owns Bank of Scotland, said the first three months of 2016 had seen “robust” performance, despite underlying profits for the January to March period down 6 per cent to £2.05bn and down from the £2.18bn recorded over the same period last year.

Chief executive Antonio Horta-Osorio said the bailed-out bank which the UK government still holds a stake of less than 10 per cent, had “continued to make good progress”.

Statutory pre-tax profits nearly halved to £654m, mainly due to a £790m charge the bank took for buying back bonds.

No further provisions were made for PPI compensation, where complaint levels were around 8,500 per week on average, broadly in line with expectations.

Lloyds was rescued by the UK government during the financial crisis of 2008, which left the state holding a 43 per cent stake in the bank.

The past two years has seen the Treasury steadily reducing its stake but in January chancellor George Osborne postponed the sale of the government’s final stake in Lloyds, citing the turmoil in financial markets.

Mr Horta-Osorio has cut thousands of jobs and said Thursday’s results reflected the bank’s “simple, low risk business model.”

Lloyds, which is the largest retail bank in Britain, said total income fell 1 per cent to £4.38bn as higher revenue from its retail bank was offset by lower income from its insurance division.

Lloyd’s results come a day after Barclays reported a 25 per cent drop in profits for the first quarter of the year.

Pre-tax profit for the first three months of the year was £793m, down from £1.1bn for the same period last year.

The bank said its so-called non-core divisions lost £815m.

Royal Bank of Scotland will publish its results tomorrow.