Britain's bailed-out Lloyds Banking Group said today that first-quarter net profit sank by almost a quarter to £1.15 billion. 

That compared with earnings after taxation of £1.53 billion the same time last year, when it registered an exceptional £776m gain from selling a big chunk of its gilts portfolio, it said in a results statement.

However, the bank said its adjusted pre-tax profit - stripping out one-off costs and provisions - climbed by 22% to £1.8 billion in the quarter.

This came on the back of cost-cutting and a sharp 57% drop in impairments. 

"We are supporting and benefiting from the UK economic recovery and are delivering better underlying profitability as well as improved returns for shareholders, from a stronger, lower risk balance sheet," said chief executive Antonio Horta-Osorio. 

He noted that the group's strategy had enabled the British government to further reduce its stake in the state-rescued lender. 

Lloyds moved a step closer to the private sector last month when the government sold another tranche of shares, cutting its stake to 24.9% from 32.7%. 

"Our simple, UK focused, low risk and low cost model is founded on creating value for customers and helping Britain prosper, and is well positioned to support and benefit from continued recovery in the UK economy and to make further progress in the remainder of 2014," Horta-Osorio said today. 

Britain had pumped £20 billion of state money into Lloyds at the top of the 2008 global financial crisis. Lloyds Banking Group was created by a merger of Lloyds TSB and rival British lender HBOS. 

However, HBOS was saddled with high-risk property investments, and LBG subsequently received the vast state bailout.