Lloyds Returns £4.2bn to UK Taxpayer in First Quarter 2014

Lloyds Banking Group has unveiled a 22% jump in first-quarter pre-tax profit and said it returned £4.2bn back to the UK taxpayer during the first three months of this year.

Lloyds said in its first quarter interim management statement that it will also apply to the government to start resuming dividend payments to shareholders.

'We made good progress in the first quarter benefiting from our simple, low risk, UK focused retail and commercial banking business model," said António Horta-Osório, CEO of Lloyds.

"We provided further support to the UK economic recovery while delivering better underlying profitability and improved returns for shareholders from a stronger balance sheet.

"The launch of our Helping Britain Prosper Plan underlines our commitment to creating sustainable prosperity for our customers and growth in the UK economy.

"Our strong performance enabled the UK government to further reduce its stake, returning an additional £4.2 billion of taxpayers' money in the first quarter."

Lloyds is just under 25% owned by the government and its largest investor is UK Financial Investments (UKFI). It has to get permission from the government before it can start paying shareholders a dividend or changing remuneration details.

The government has now sold 36% of its original stake in Lloyds, which now stands at 24.9%.

On 25 April, Lloyds gained government support over its plan to pay staff up to 200% of their salaries in bonuses.

The UK finance ministry said in a statement that it will support Lloyds setting a bonus cap at a maximum of 2:1 although it snubbed the Royal Bank of Scotland's (RBS) similar bid for the same pay ratio.

Lloyds made an underlying profit of £1.8bn in the first quarter.