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Lloyds reports strong Q1 profits despite TSB sale losses

Lloyds reports strong Q1 profits despite TSB sale losses

Lloyds reported £2.2 billion in profits in the first quarter of 2015 which represents a 21% rise on last year’s figures, surpassing profit forecasts. The banking giant’s losses were also down to £177 million, constituting a 59% fall from the preceding year. This performance is impressive given that the banking group made £660 million worth of losses after selling its 10% stake in TSB to Banco Sabadell. The losses from the sale of TSB result from costs relating to the removal of TSB from Lloyds’ computer servers. Lloyds has a transitional service agreement for the provision of IT services to TSB and has also contributed financially to the process of TSB’s move to a new IT system.

The European Commission had forced Lloyds to sell the TSB group after the UK government bought a 43% stake in it in 2009 following the financial crisis, since this was held to constitute ‘state aid’. Richard Hunter, the Head of Equities at Lloyds has said that there will no further PPI provision for this quarter relating to the mis-selling of PPI products. Overall, Lloyds is positive about its future prospects, with a rise in its share price, and plans to follow through and pay dividends to its shareholders for the full and half-year of 2015.

 

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