Shares in Lloyds Banking Group (LON:LLOY) have slipped marginally into the red in London this morning as the company updated investors on its first-quarter performance, revealing a rise in underlying profits. The bailed-out group further reassured investors that it would not cancel its preference shares following complaints after Aviva (LON:AV) disclosed plans for such a move which it subsequently abandoned.
As of 09:02 BST, Lloyds’ share price had dropped 0.48 percent to 65.81p. The stock is marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.32 percent lower at 7,401.53 points.
Lloyds’ first-quarter profits rise
Lloyds disclosed in a statement this morning that its statutory profit before tax had jumped 23 percent to £1.6 billion in the first quarter of the year, with return on tangible equity increasing to 12.3 percent, reflecting improved underlying profit and lower below the line items. The group’s net income meanwhile came in four percent higher at £4.3 billion. Underlying profit rose 25 percent to £2 billion.
“In the first three months of 2018 we have again delivered strong financial performance with increased profits and returns, a significantly reduced gap between underlying and statutory profit and a strong increase in capital,” the group’s chief executive Antonio Horta-Osorio commented in the statement.
Preference shares update
Reuters separately quoted Lloyds’ chief financial officer George Culmer as providing reassurance today that the lender would not cancel its preference shares.
“Absolutely no discussion on these and absolutely no plans to cancel these irredeemable preference shares through a reduction in capital,” said in a media call, as quoted by the newswire. Reuters further quoted Laith Khalaf, senior analyst at Hargreaves Lansdown, as weighing in on Lloyds’ results, noting that the bank had made a good start to the year. He, however, also added that while the bank had rebuilt profits and delivered steady returns to investors, share price gains had been more elusive.