Britain's biggest retail bank Lloyds Banking Group today reported a 21% rise in underlying pretax profit for the first quarter, reflecting an improved margin and lower losses for bad debts.
The UK lender said it made a pre-tax profit before one-off items of £2.2 billion for the three months to the end of March.
This was at the top end of expectations, according to a Reuters poll of analysts.
The bank said losses from bad debts fell 59% from a year ago to £177m. Asset quality this year should be better than previously indicated, it said.
Its net interest margin - the difference between interest it gets from borrowers and what it pays to savers, a key driver of revenues - jumped 33 basis points to 2.65%.
It said it expects to exceed previous guidance for its NIM to be 2.55% this year.
Chief executive Antonio Horta-Osorio has turned Lloyds' fortunes around, enabling Britain to sell half its 41% stake in the bank, which was rescued at a cost of £20 billion to taxpayers during the 2007-09 financial crisis.
Lloyds announced its first dividend in February since being bailed out and the Conservative party has said it will sell a further £9 billion worth of shares in the next year should it win the election, including a sale to retail investors.
Lloyds said it planned to pay a dividend for the half-year and full year for 2015, as previously guided.
The bank made a statutory profit of £1.2 billion, down 11% on the year, after incorporating a £660m charge on the sale of its challenger bank TSB to Spain's Banco de Sabadell.
