Lloyds posts profit in line with hopes amid slowdown in UK economy

LONDON, April 28 (Reuters) - Lloyds Banking Group (Other OTC: LLOBF - news) reported underlying profits in line with expectations on Thursday, keeping first quarter revenues steady and cutting bad debts despite the challenging economic environment.

Lloyds, Britain's largest mortgage lender, reported underlying pre-tax profit of 2.1 billion pounds ($3.05 billion) in the first quarter of this year, compared with a profit of 2.19 billion pounds a year earlier.

That was in line with the 1.99 billion pound average estimate of three analysts surveyed by Reuters.

Chief Executive Officer Antonio Horta-Osorio is eliminating thousands of jobs to streamline the business and support a progressive dividend plan.

Lloyds was rescued with a 20.5 billion pound taxpayer-funded bailout during the 2007-09 financial crisis, leaving the state holding 43 percent. It (Other OTC: ITGL - news) has since reduced its holding to less than 10 percent, raising over 16 billion pounds.

The UK government is seeking to return the bank to private hands by March next year. ($1 = 0.6874 pounds) (Reporting By Andrew MacAskill and Lawrence White, editing by Sinead Cruise)