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ECN redemption charge dents Lloyds Q1 profit

reported unaudited first-quarter statutory profit attributable to equityholders of £506 million, down from £913 million a year ago.

EPSdeclined year over year to 0.6 penny from 1.2 pence.

First-quartercharges from the redemption of enhanced capital notes increased to £790million from £65 million.

Thegroup's underlying profit reached £2.05 billion, compared to £2.18 billion inthe first quarter of 2015. Underlying EPS dropped to 1.9 pence from 2.3 pence.

Conductprovisions, which were not booked in the first quarter of 2015, were £115million. Restructuring costs rose to £161 million from £26 million, andcomprised severance related costs incurred to deliver phase II of theSimplification program and the costs of implementing ring­fencing. Lloydsnoted that phase II of the Simplification program has delivered £495 million ofannual run­-rate savings to date, ahead of plan and on track to deliver £1billion of Simplification savings by the end of 2017.

Statutorynet interest income amounted to £2.76 billion, up from £2.26 billion in thefirst quarter of 2015. The banking net interest margin increased to 2.74% from2.60%. The bank said the improvement in net interest margin was due to improveddeposit pricing and mix, lower wholesale funding costs and a benefit from therecent ECN redemptions.

Otherincome net of insurance claims dropped to £612 million from £2.28 billion.

Impairmentcharges declined to £133 million in the first quarter from £144 million in theyear-ago period.

Thegroup's transitional common equity Tier 1 capital ratio stood at 12.9% at theend of March, up from 12.8% at 2015-end. The fully loaded CET1 ratio stood at12.8% as of March 31, down from 13.0% at the end of 2015.