Lloyds Banking Group's (LLOY) first-quarter pre-tax profit recovered from last year's slender £280m to a far healthier-looking £2.04bn - driven largely by a 40 per cent slide in the impairment charge, no further PPI-related provisions and more cost-savings. Raising £394m through selling a 20 per cent stake in St James's Place helped, too - the bank still retains 37 per cent of the financial services business.
Management says that around £2bn of cost savings have been achieved since 2010 - some £1bn higher than had originally been targeted. Lloyds' exposure to struggling eurozone countries has also fallen 2 per cent since the year-end to £18.3bn and that should fall further after announcing plans last month to sell its Spanish retail operation to Banco Sabadell. Lloyds' current exposure to Spain stands at £4.3bn. But, while net lending in the 'core' bank rose by £600m in the quarter, mortgage lending fell by £1.7bn - suggesting that credit demand still remains fairly weak.
