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Lloyds Banking Group announces return to profit

Bailed-out bank returns to profit as losses on bad debt fall.

Lloyds Banking Group has announced it returned to profit in the first three months of this year and expects to continue to make profits throughout 2010.

The bank, now 41 per cent state-owned, said losses on bad debts had continued to fall, helped by management of problem loans and economic improvement.

Chief executive Eric Daniels said: "I am pleased to report that we returned to profitability in the first quarter and expect this momentum to be sustained throughout 2010". He added: "Based on the group's current economic and regulatory assumptions we expect this trend to continue and for the group to deliver a combined businesses profit at both the half year and full year."

But the bank said that losses on its investments in Ireland, which has suffered a deep recession, remained a concern and that bad debts in the international division remained at a high level in the first quarter.

Shares in the bank closed at 70.24p on Monday, 11p above the above the average price of 63.2p paid by the government for its stake.