Lloyds Banking Group saw pre-tax profits surge to £1.9 billion in the first quarter of the year, following a significant release of money set aside for covid-related loan losses.

The bank said that it faced an impairment charge of £323 million in the first three months of 2021, compared to a charge of £1.43 billion during the same period in the previous year.

Lloyds reported that the net credit in the quarter was driven by “continued strong asset quality” and the UK’s improved economic outlook, with a low charge of £209 million given the continued benign credit environment, along with a £459 million release of expected credit loss.

But the group’s outgoing chief executive, António Horta-Osório, remained cautious.

“Whilst we are seeing positive signs, notably the progress of the vaccine roll-out and the emergence from lockdown restrictions, the outlook remains uncertain,” said António Horta-Osório, group chief executive. “The Group remains absolutely focused on supporting its customers and Helping Britain Recover from the financial effects of the pandemic.”

The chief exec, who will be joining Credit Suisse as chairman next month, said that the long-run transformation of the bank had positioned the business well to address the challenges of the pandemic.

“We have made a strong start to the year with the quarterly results and on delivering Strategic Review 2021,” added Horta-Osório. "It is with both pride and sadness that I will step down as Group Chief Executive later this month. Most importantly, the Group is well placed for sustainable success and the publication of Strategic Review 2021 in February shows that the Group has clear execution outcomes for 2021, underpinned by long-term strategic vision.”

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