* First quarter pretax profit at 1.9 bln pounds
* Bank releases bad loan provisions on better outlook
* CEO Horta-Osorio leaving for Credit Suisse
(Adds updated guidance)
By Iain Withers and Lawrence White
LONDON, April 28 (Reuters) - Lloyds Banking Group
reported better than expected profits for the first three months
of the year, in the last set of results before Chief Executive
António Horta-Osório's leaves Britain's biggest domestic bank.
Lloyds reported 1.9 billion pounds ($2.64 billion) pretax
profit for the first quarter on Wednesday, compared to an
average of analyst forecasts of 1.1 billion pounds. The bank had
posted a narrow 74 million pound quarterly profit a year
earlier.
The bank's profits were boosted by the release of 459
million pounds that had been set aside for expected bad loans.
It had been expected to book more charges to cover soured debts.
Horta-Osório is leaving Lloyds after a decade in the role to
become Chairman of crisis-hit Swiss bank Credit Suisse,
with his appointment expected to be confirmed at an investor
meeting on Friday. HSBC executive Charlie Nunn is set to join
Lloyds as CEO in August.
HSBC kicked off British bank quarterly earnings on
Tuesday by also posting better than forecast profits after a
similar release of bad loan provisions.
Like HSBC, Lloyds said the economic outlook in Britain now
looked better than it had initially feared, leading to the
provisions release and improved guidance for the year.
Lloyds said return on tangible equity was now expected to be
8-10% this year, while net interest margin would be above 2.45%.
Costs would be trimmed below 7.5 billion pounds, the bank said.
Horta-Osório is preparing to chair the board at Credit
Suisse, widely seen as one of the toughest jobs in banking.
The Swiss lender is reeling from multi-billion dollar losses
from the collapse of family office Archegos, the fallout from
insolvent British finance company Greensill and a spying scandal
last year that ousted its former CEO Tidjane Thiam.
Horta-Osório set out fresh targets to expand Lloyds'
insurance and wealth business and further cut costs in February,
but has left formulating a longer term strategy to his successor
Nunn.
Nunn rose through the ranks at HSBC to become head of wealth
and personal banking, after a career in consulting.
($1 = 0.7205 pounds)
(Reporting by Iain Withers and Lawrence White, Editing by Anna
Irrera)