Lloyds bank posts 45% drop in quarterly net profits

A Lloyds Banking Group branch is pictured in central London on August 4, 2011. Britain’s state-rescued Lloyds Banking Group on Thursday reported a first-half net loss of £2.3 billion (2.6 billion euros, $3.8 billion) after being forced to compensate clients who were mis-sold insurance. LBG, which last month axed 15,000 jobs as it bids to halve its international division, said its loss after tax for the six months to June compared with a net profit of £596 million in the first half of 2010. AFP PHOTO

LONDON , United Kingdom (AFP) — Lloyds Banking Group on Thursday announced a 45-percent drop in first quarter net profit on expected costs linked to the repurchasing of bonds launched after the financial crisis.

Underlying pre-tax profits were largely stable and chief executive Antonio Horta-Osorio said the first three months of the year had delivered “a robust financial performance” and left the group with a strong balance sheet.

LBG, which has been returned almost fully to the private sector after a state-bailout during the 2008 financial crisis, said that profit after tax stood at £506 million ($737 million, 650 million euros) in the first three months of the year.

That compared with net profit of £913 million in the first quarter of 2015, it added in an earnings statement.

LBG said that as expected it had taken a charge of £790 million relating to the redemption of ECNs, or a type of bonds.

The British government bailed out Lloyds at the height of the financial crisis at a cost of some £20 billion, handing the state a 43-percent stake in the bank.

It has since reduced its holding to around 9.0 percent following numerous share sales.

Prime Minister David Cameron’s government in January said it would delay selling the final tranche of shares owing to turbulence in financial markets.

It had intended to start offloading the final tranche of shares before the second half of 2016.