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Lloyds Banking Group statutory profit before tax down 11%

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Lloyds Banking Group   A loss of £660m on the sale of TSB

Lloyds Banking Group recorded a loss of £660m on the sale of TSB to Spanish bank Banco de Sabadell. As a result, its statutory profit before tax fall by 11% to £1.214bn in the first quarter of 2015.

Underlying profit was up 21% to £2.178bn, with boss António Horta-Osório saying there had been "continued improvement in financial strength". The bank also said there had been no further provision during the quarter to cover the mis-selling of PPI products.

Lloyds was forced by the European Commission to sell or spin-off TSB. This followed the UK government's purchase of a 43.4% stake in the group in 2009, a move which the Commission said involved state aid. Lloyds floated TSB on the stock market in 2014. A takeover of TSB by Sabadell was announced in March, but the deal has yet to be completed.

The sell-off of TSB is costing Lloyds because of the charges involved in removing TSB from its computer servers, with the cost estimated to be £450m.

In a statement accompanying its results, Lloyds said: "We agreed the sale of our remaining stake in TSB to Banco de Sabadell in the first quarter and as part of this agreement, we sold 9.99% of our stake in March.

"The full disposal of TSB will enable us to meet our commitment to the European Commission ahead of the mandated deadline."

The bank also said losses from bad debts fell 59% on the same period a year ago to £177m. Lloyds also said it planned to pay a dividend for the half-year and full year for 2015, as previously indicated.

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