Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Lloyds Banking Group PLC (ADR) (LYG): Key Figures To Know

LONDON — Shares in Lloyds Banking Group PLC (ADR) (NYSE:LYG) shot up 4.5% in early trade, to 55.90 pence, following its announcement of a huge increase in year-on-year first-quarter profits.

Statutory pre-tax profit increased to 2.04 billion pounds from 280 million pounds in Q1 2012, the gulf created between the two figures largely down to there being no money set aside to cover mis-sold financial products this year, while impairment charges were significantly reduced, by 40% to 1 billion pounds, which exceeded expectations. Management was also able to cut costs by 6% against the comparative quarter, to 2.41 billion pounds, while “simplification run-rate savings” rose to over 1 billion pounds.

Lloyds Banking Group PLC (ADR) (NYSE:LYG)

Profits were aided by group net interest margin increasing to 1.96%, which is on track to meet guidance for 2013. Elsewhere, total underlying income rose 3% to reach 4.89 billion pounds, which took into account the 394 million-pound gain relating to the sale of shares in St. James’s Place.

Chief executive Antonio Horta-Osório commented:

We made substantial progress again in the first quarter. Underlying and statutory profits improved significantly, and our core loan book returned to growth earlier than expected. Margin increased, and costs and impairments continued to fall rapidly, with this progress underpinned by a further strengthening of our balance sheet.

We are delivering real benefits for customers, colleagues and shareholders by investing behind our simple, UK customer-focused retail and commercial banking model, and are now further ahead in our plan to transform the Group, as reflected in the enhanced guidance for costs and capital we are giving today.

The 39% taxpayer-owned bank declared last week that it still intends to rebrand 632 branches as TSB Bank and float the division on the stock market, after the European Commission had instructed Lloyds Banking Group PLC (ADR) (NYSE:LYG) to sell the branches as part of the state bail-out the bank received during 2009. Additionally, the sale of its Spanish retail operations will lead to a further reduction of 1.5 billion pounds in non-core assets.

Positive news like today’s is beginning to see investors take an interest in the sector once more. Banking’s fortunes remain tied to the activities across the eurozone for now, but if it can recover then there could be significant gains to be made.

The article Lloyds Banking Q1 Profits Rise to 2 Billion Pounds originally appeared on is written by Sam Robson.

Sam does not own any share mentioned in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.