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		</div><p>Lloyds Banking Group has insisted it delivered a &#8220;robust&#8221; performance in the first three months of the year despite posting falling profits.</p>
<p>The lending giant saw bottom-line profits nearly halve, down 46% to £654 million in the first quarter, as it was hit by charges from buying back expensive bonds from investors.</p>
<p>Profits fell 6% to £2.1 billion on an underlying basis, but it said that excluding the TSB business sold last year, profits were &#8220;stable&#8221; on a year earlier.</p>
<p>Antonio Horta-Osorio, group chief executive of Lloyds, said the results show the group&#8217;s ability to &#8220;actively respond to the challenging operating environment&#8221;.</p>
<p>But shares fell 2% after the results.<br />
Lloyds took a £790 million charge from its controversial decision to buy back £3 billion of high-interest bonds &#8211; also called &#8220;enhanced capital notes&#8221; or ECNs.</p>
<p>It won a lengthy legal battle against investors unwilling to sell the bonds, which offered high levels of income, and the bank will receive a £900 million cash boost from the move over the next four-and-a-half years.</p>
<p>Figures from Lloyds come after a difficult first quarter for banks, with investment banking rivals hit particularly hard amid recent stock market turmoil.</p>
<p>Barclays posted a 25% fall in first-quarter profits on Wednesday after its corporate and investment banking arm saw underlying profits fall 31%.</p>
<p>Royal Bank of Scotland will reveal how it has fared on Friday.<br />
Retail players have been shielded from the worst of the banking woes, thanks in part to a buy-to-let lending rush ahead of this month&#8217;s stamp duty increase.</p>
<p>Lloyds said the first quarter had been &#8220;incredibly strong&#8221; for mortgages after seeing a surge in demand from buy-to-let borrowers and those buying second homes.</p>
<p>It saw buy-to-let lending rise 3% in the first quarter of the year, helping drive an overall 1% rise in mortgages.</p>
<p>Mr Horta-Osorio added to a flurry of warnings this week over a drop-off in lending following the April 1 stamp duty hike.</p>
<p>But the group said lending was set to level out over the year.<br />
Santander warned on Wednesday that the mortgage industry faced &#8220;challenges&#8221; over the year ahead following the drop-off in demand since April 1 and ahead of the EU referendum.</p>
<p>Estate agencies Countrywide and Foxtons also said they expected a marked slowdown in activity.</p>
<p>Lloyds, which holds its annual general meeting for shareholders in mid-May, said it took no further charges for the payment protection insurance (PPI) mis-selling scandal, with claims &#8220;broadly&#8221; in line with its expectations at around 8,500 a week.</p>
<p>A £2.1 billion hit from PPI last year sent its statutory pre-tax profits down by 7% to £1.64 billion in 2015.</p>
<p>Lloyds has ramped up cost-cutting measures in the past few months under a plan set out in 2014 to close 200 branches and slash 9,000 jobs by the end of 2017.</p>
<p>Last week it announced 625 job cuts, with some roles going offshore to India, although these were part of the job losses announced in 2014.</p>
<p>Taxpayers still own just under 9% of Lloyds and a British Government plan to sell the remaining shares in February was postponed amid turmoil in the financial markets.</p>
<p>The British Government will only sell the shares when the price rises above the 73.6p break-even level at which Lloyds was bailed out at the height of the financial crisis.</p>
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