Lloyds Underlying Profit More Than Doubles In 2013

(RTTNews) - British banking major Lloyds Banking Group Plc (LYG, LLOY.L) Thursday said its underlying profit for 2013 more than doubled from last year, reflecting improved profitability in its core business and a significant reduction in non-core losses. The firm posted a narrower loss for the full year.

The company noted that as it is improving its capital position and profitability in a sustainable way, the UK Government has started the process of returning the Group to full private ownership.

António Horta-Osório, Group Chief Executive said, "Over the last three years we have reshaped, strengthened and simplified our business to create a low-risk efficient retail and commercial bank that is focused on our customers and on helping Britain prosper. These results, with Group underlying profit more than doubled to £6.2 billion, confirm that the Group is returning to robust health..."

Underlying profit for the year was 6.17 billion pounds, compared to 2.57 billion pounds a year earlier. Core underlying profit before tax grew 24 per cent to 7.57 billion pounds, primarily reflecting reduced impairment charges and stronger net interest income.

On an underlying basis, the Group net interest margin increased 19 basis points to 2.12 percent, total costs reduced 5 percent to 9.64 billion pounds, and impairment charge fell by 47 percent to 3 billion pounds.

Loss attributable to equity shareholders was 838 million pounds, narrower than 1.47 billion pounds in the prior year. Loss per share was 1.2 pence, compared to a loss of 2.1 pence per share last year. The company said it has restated its prior-year results.

The Group statutory profit before tax was 415 million pounds, compared to a pre-tax loss of 606 million pounds in 2012, driven by the improvement in underlying profit and a lower provision for legacy issues.

Provision for legacy issues in the current year totaled 3.46 billion pounds compared to 4.23 billion pounds charge in 2012. Of these provisions, 3.05 billion pounds was related to PPI.

Annual total income was 37.99 billion pounds, down from 38.91 billion pounds reported last year.

Net interest income declined to 7.34 billion pounds from 7.72 billion pounds a year ago. Meanwhile, net trading income increased to 16.47 billion pounds from 15.01 billion pounds in the prior year.

In 2013 the Group was subject to a higher effective tax rate than the UK statutory rate, primarily due to an additional tax charge from impacts on net deferred tax asset of the reduction in the UK Corporation tax rate, the disposal of its Australian operation and policyholder tax.

LLOY.L is currently trading at 80.16 pence, down 3.37 pence or 4.03 percent, on a volume of 116.04 million shares.