Interim Management Statement
Key highlights
In the first quarter of 2010 the Group returned to profitability on a combined businesses basis due mainly to a significant slowing of impairments in the wholesale business.
The Group is delivering good income growth, on a combined businesses basis, excluding last year's impact from liability management transactions.
Banking net interest margins are running in line with recent guidance of circa 2 per cent for the full year.
Costs continue to be well controlled and remain lower than the equivalent period in 2009. Integration savings are being delivered in line with recent guidance and the Group remains on track to achieve a 2 billion run-rate of synergies and other operating efficiencies by the end of 2011.
The run rate of impairments has slowed significantly and has continued to perform better than our 2009 preliminary results guidance in both retail and corporate businesses.
Customer deposit gathering has remained robust, with good growth in balances, while lending balances are flat. Asset reductions within the Group's portfolios identified for run-off continue albeit, as expected, at a slower pace than last year.
The Group continues to de-risk its funding position, with strong term issuance in the early part of the year while continuing to maintain high levels of liquid assets.