Lloyds Banking Group reports Q1 profit

LONDON: Britain's part-nationalized Lloyds Banking Group said Tuesday that it turned a profit in the first quarter as the rate of impairments on bad loans slowed.

In a trading update, Lloyds said such provisions were lower in both its retail and wholesale divisions.

Lloyds, created from the merger of Lloyds TSB and Halifax/Bank of Scotland, said it was also making good progress on integration savings, and expects to achieve 2 billion pounds ($3.1 billion) worth of synergies and other savings by the end of next year.

The government currently holds a 41 percent stake in the bailed-out company.

Customer deposits rose by 5 billion pounds in the first quarter, while lending balances were little changed, the company said.

``Impairments have slowed significantly in the first few months of the year giving us confidence that we will achieve a better financial performance than previously guided,'' said Chief Executive Eric Daniels.

``I am pleased to report that we returned to profitability in the first quarter and expect this momentum to be sustained throughout 2010.''

Lloyds does not publish quarterly earnings reports; first half results are due in August.

``Based on the group's current economic and regulatory assumptions we expect this trend to continue and for the group to deliver a combined businesses profit at both the half and full year,'' Lloyds said.