Updates from Lloyds, BP and Unilever
Across the water, the Dow Jones also picked up strongly, climbing almost 107 points, up +0.72%, finishing Monday at 14,818. %VIRTUAL-SkimlinksPromo%
First, Lloyds. The Black Horse gallops back into the black, finally. There's no more additional provision for PPI and lending is on the up. Group underlying profit soars to £1,479 million (Q1 2012: £497 million) while there's a 40% cut in impairment charges to £1,002 million (Q1 2012: £1,657 million).
With the commercial banking core loan book returning to growth, Lloyds claims SME net lending growth of +4% in the last twelve months (against a market contraction of -4%). There's more than £350 million committed to manufacturing in the first quarter of 2013; on track to exceed £1 billion target, Lloyds claims.
Lloyds is also cutting its exposure to the Spanish market by selling its retail banking operations in Spain. The business will be acquired by Banco Sabadell while Lloyds receives a 1.8% stake in the Spanish bank worth around £72m.
Next, quarterly numbers from BP, recently rapped for North Sea safety failures. Underlying replacement cost profit for the quarter was $4.2bn, compared to $3.9bn in the fourth quarter and $4.7bn in the first quarter of 2012. Operating cash flow was $4.0bn, compared with $3.4bn in the first quarter of 2012.
Mostly as a result of the Russia transaction, net debt at the end of the first quarter fell to $17.7 billion, equivalent to a gearing level of 11.9%, in the lower half of BP's 10-20% target range says the company.
"The early completion of the sale of our interest in TNK-BP," says boss Bob Dudley, "has also allowed us to begin a share buy-back programme which we expect to return up to $8 billion to our shareholders and reflects the reduction in BP's asset base following our divestment programme over the past three years."
Lastly, Unilever has announced a voluntary offer to up its stake in Hindustan Unilever (HUL), its publicly listed subsidiary in India, from 52.48% to up to 75% at a price of INR 600 per share. The cash offer represents a premium of approximately 29.5% over the mandatory floor price required under Indian regs and a premium of 26.0% to HUL's last one month's average trading share price.
Unilever's offer follows strong fourth quarter earnings from HUL with net profits for January-March quarter climbing +15% year-on-year, part-fuelled by a drop in the cost of raw materials.
"This represents," says boss Paul Polman, "a further step in Unilever's strategy to invest in emerging markets and offers a liquidity opportunity at what we believe to be an attractive premium for existing shareholders. The long heritage and great brands of Hindustan Unilever, and the significant growth potential of a country with 1.3 billion people makes India a strategic long term priority."