Shares in Lloyds (LSE: LLOY) were up 4% to 78p in early trade after the bank reported a 22% rise in underlying profitto £1.8bn  in the three months to March.
Lloyds chief executive, António Horta-Osório, commented on the “good progress” made on its path to recovery.
Lloyds reported a drastic fall in impairment charges of 57% and no new provisions were made for PPI.
Lloyds continues to prepare for an IPO of its TSB business in the summer of this year. Retail investors will be offered a chance to buy shares in TSB, while fresh Lloyds shares may be on offer to retail investors in the autumn.
Meanwhile, statutory profit fell 33% to £1.4bn, although last year’s £2bn was boosted by a £776m sale of government bonds.
Lloyds’ chief executive added:
“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 still expects to apply to the regulator in the second half of the year to restart dividend payments.
Analysts expect Lloyds to deliver earning per share of 7p in 2014, meaning that at today’s price, shares in Lloyds trade on a P/E of 11.
