Lloyds announce a return to profit

Following heavy debts throughout last year, the Lloyds Banking Group have announced a return to profit for the first quarter of 2010.

Lloyds sustained significant losses of around £6.3 billion in 2009, and £6.7 billion the year before. According to the group these losses were largely caused by borrower defaulting on their debts to the bank.

In spite of this, Lloyds have reported that the amount of bad debt has seen a significant fall, helping the banking group see a return to profit.

Eric Daniels, Lloyds' Chief Executive, commented:

“Impairments have slowed significantly in the first few months of the year giving us confidence that we will achieve a better financial performance than previously guided.”

Many economist see this as a positive sign for small businesses and the UK's economy, suggesting that individuals and small businesses are finding it easier to cope with debt repayments.

However, Nick Clegg, leader of the Liberal Democrats, warned that the government must not rush to sell its stake in Lloyds, adding:

"If you do that too quickly, then the banks have even more incentive to hold on to money to repair their balance sheets and not lend it to British businesses."

27/04/10