Lloyds records £1.9bn profit as bank reverses loan provisions

António Horta-Osório set to leave as chief executive of Lloyds

Lloyds (LON:LLOY) saw its profits soar during Q1 as a more positive outlook allowed the bank to reverse some of provisions it had made for loan losses following the spread of coronavirus.

The FTSE 100 bank followed in the footsteps of HSBC earlier in the week by writing back some of last year’s losses.

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A number of banks took large forward-looking provisions around the beginning of the pandemic, although defaults have stayed low, thanks in part to government support.

Lloyds confirmed it has made a profit before tax of £1.9bn for the quarter ending in March, well up from below £100m for the same period a year ago.

The improvement can be mostly put down to a drop in bad debt provisions. Lloyds reported a net impairment credit of £323m, compared with a £1.4bn charge in the first quarter of 2020.

The group’s revenues fell by 7% compared to the year before to £3.7bn, while the fall was still below what analysts had expected, the Financial Times reported.

Chief executive António Horta-Osório, who is set to leave to become chairman of Credit Suisse, said the pandemic “continues to have a significant impact on people”, but added that “the long-run transformation of the group has positioned the business well to address the challenges”.

He is being replaced by the HSBC banker Charlie Nunn, who will take over at Lloyds on 16 August. The chief financial officer, William Chalmers, will act as chief executive in the interim.

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