Lloyds Banking Group PLC profits hit £1.9bn as bad debts tumble

PLC () posted profits of almost £1.9bn in its first quarter as bad debt charges tumbled.

The bank also upped its expectations for the remainder of the year in what was chief executive António Horta-Osório’s last results before he leaves to become chair of .

Going forward, the bank said it expects lower costs, improved net margins and lower bad debts due to the improving economic backdrop in the UK.

Profits in the three months to end March 2021 jumped to £1.9bn (£74mln) compared to a year ago helped by a £1.75bn swing in bad debts, with a £323mln credit compared to a charge of £1.43bn when the Coronavirus (COVID-19) pandemic first took hold.

Lloyds said in total it released £459mln from previous impairment provisions due to the UK’s improved economic outlook as the vaccination programme progresses and as businesses start to reopen again.

For the full year, the impairment charge is now expected to be materially below previous expectations, the bank said.

Revenues fell by 9% in the quarter due to lower interest rates which reduced its banking net margin.

The bank’s other income also fell due to the impact of Coronavirus on customer and new business activity.

On dividends, the bank said it is accruing them with the intention to resume a sustainable and progressive policy.

Horta-Osório said: “It is with both pride and sadness that I will step down as group chief executive later this month.

“Most importantly, the group is well placed for sustainable success and the publication of Strategic Review 2021 in February shows that the group has clear execution outcomes for 2021, underpinned by long-term strategic vision.”