Lloyds Bank reports 33% rise in profit, warns of Iran war impact

* Profit rise driven by lending income

* Takes 151 million pound charge ​for Iran ⁠conflict risks

* Says Middle East war could hurt UK ​economy and unemployment

* No new provision made for UK motor finance scandal (Adds CFO comments and explanation of charge in paragraphs 4-6, Share price performance ​in ‌paragraph 8, motor finance details paragraph 11)

LONDON, April 29 (Reuters) - Lloyds Banking Group reported a better-than-expected 33% rise in first-quarter profit on ⁠Wednesday, as increased lending income offset a 151 million pound ($204 million) charge ⁠to reflect the impact of the Iran war ​on the global economy.

The British bank reported statutory profit before tax for January-March of 2 billion pounds, up from 1.52 billion pounds in the same period a year ago and above the average analyst estimate of 1.84 billion pounds.

Lloyds said ​the war ‌in the Middle East could hurt Britain's economy as well as global growth, and trigger a rise in the unemployment rate.

"We are assuming a gradual de-escalation of hostilities over the course of the year," CFO William Chalmers told reporters on a conference call, adding that the bank had taken a small provision to reflect the hit to global growth ​in that scenario.

Such charges are a feature of accounting rules that were put in place after the 2008 financial ‌crisis, and require banks to measure their loans against market prices and recognise a portion of any expected losses in advance.

The charge was small in relation to the ‌lender's 486 billion pound loan book, and did not impact profits as Lloyds grew assets and trimmed operating costs by 3%.

The bank said it was on track to meet its performance targets for the year, after lifting its key ​profitability target in January to make a return on tangible equity greater than 16% in 2026. Lloyds' shares, which have gained 34% in the last ‌year as it and other British banks grew income in a favourable interest-rate environment, were flat in early trading on Wednesday, in line with the benchmark FTSE index.

The bank's recent financial results have been marred by its exposure to a UK ⁠motor finance ⁠scandal, in which customers were sometimes not told about hidden commissions.

Lloyds said it ‌had not made any fresh provision for consumer redress in the first quarter.

The Finance & Leasing Association, which is leading the banking industry's response to the ​probe into past commissions, on ​April 26 said it will not challenge the Financial Conduct Authority's redress scheme which ‌the regulator has estimated will cost the industry 9.1 billion pounds. Lloyds CEO Charlie Nunn said the bank would present its new strategy alongside its half-year results in July, as its previous five-year plan for 2022-2026 comes to an end.

Lloyds