Underlying Profit Drops Slightly At Lloyds Bank
Lloyds has been attempting to boost capital and work on a low risk business model.
Today Lloyds Banking Group Plc (LON:LLOY) released a trading update to investors and analysts for the three months ending 31st March 2016 in which it said the company made a robust financial performance with stable underlying profit and strong underlying returns.
The bank reported underlying profit of £2.1 billion with an underlying return on required equity of 13.8 per cent. A statutory profit before tax was reported at £0.7 billion after an expected £0.8 billion charge relating to Enhanced Capital Notes (ECNs) was redeemed in the period.
Tangible net assets per share increased to 55.2 pence compared to 52.3 pence in the prior year which the business said was driven by underlying profit and reserve movements.
Lloyds has been attempting to differentiate itself from other banks through cost discipline and by using a low risk business model to provide a competitive advantage over other banks.
António Horta Osório, Chief Executive of Lloyds said:
“In the first three months of this year we have continued to make good progress, delivering a robust financial performance and maintaining our strong balance sheet. These results demonstrate the strength of our differentiated, simple, low risk business model and reflect our ability to actively respond to the challenging operating environment.
We continue to support and benefit from a resilient UK economy and remain focused on delivering on our targets to people, businesses and communities as set out in our updated Helping Britain Prosper Plan. We have also recently launched our SME charter to help small businesses grow and to provide access to funding. In addition, we continue to make good progress in our strategic initiatives: creating the best customer experience; becoming simpler and more efficient; and delivering sustainable growth.
This performance, coupled with our differentiated, capital generative, business model, underpins our confidence in generating superior and sustainable returns as we aim to become the best bank for customers and shareholders.”
The business reaffirmed its guidance for the year outlining a net interest margin for the year of 2.70 per cent.
