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Lloyds Is on the Path to Recovery

Shubh Datta
May 31, 2012

Earlier this month, British banking giant Lloyds Banking Group (NYSE: LYG  ) reported that it posted a quarterly profit, although a marginal one, helped by a fall in impairment charges as well as a reduction in costs. Its $16.1 million gain overturned the huge $3.89 billion loss it had reported in the year-ago period.

Taking provisions
The bank partly owned by the U.K. government (41%, following its bailout), had to set aside a further  $608.3 million this quarter, for selling faulty payment protection insurance to customers. That's in addition to the $5.19 billion in fines Lloyds had already paid last year. However, Lloyds isn't alone in having to revise its payment protection insurance provision. Barclays (NYSE: BCS  ) , which slumped to a loss of  $546.67 million, raised its provision by $486.65 million. Royal Bank of Scotland (NYSE: RBS