Lloyds’ move into the black sets the scene for a bumper banking season

LLOYDS Banking Group set the scene for the return of bumper bank profits today, on the back of a “resilient” economy and low unemployment.

The UK’s biggest mortgage lender’s profits rose 23% in the first quarter to £1.6 billion, a result likely to be matched by peers in the next few days. Finance director George Culmer said it was a “great start to the year”.

He also promised that the bank has “no plans to cancel … irredeemable preference shares”, of which there are £300 million in issue.

Asked if Lloyds could do more to help TSB, which moved its computer systems away from Lloyds at the weekend and immediately saw its system crash, he replied: “We fulfilled our obligations. There is nothing more that we can do.”

Lloyds shares remain in limbo. They were 66p today, only a little above the 62p they were when chief executive Antonio Horta-Osorio joined in March 2011. The lender set aside another £90 million for the ongoing PPI scandal — it has paid out £18 billion so far. The bank’s net interest margin — the gap between what it pays savers and charges borrowers — rose from 2.8% to 2.93%.

But Lloyds’ recent 70 further branch closures were attacked. The Federation of Small Businesses’s Mike Cherry said: “The public was there for the bank during the crash. It’s high time that support was returned. With profits like these, are another 70 closures necessary?”