Lloyds Bank has announced a robust financial performance for the first half of the year, demonstrating income growth and sustained momentum across its operations.
The FTSE 100 heavyweight, which encompasses Lloyds, Halifax, and Bank of Scotland, reported a statutory profit after tax increase of £2.5 billion, a 4% rise year on year, along with a substantial underlying profit of £3.6 billion, as reported by City AM.
The bank attributed this growth surge to strategic initiatives, enhanced digital capabilities, and improving UK economic conditions.
Improved household finances and renewed business confidence created favourable conditions for growth across the bank’s business sectors, resulting in a net income of £8.9 billion.
Increase in lending
Lloyds experienced significant growth in lending and deposits, with underlying loans and advances to customers increasing by £11.9 billion in the first six months to £471 billion. Retail growth rose by £10.1 billion, while commercial banking saw an increase of £1.2 billion.
Customer deposits also grew by 2% to £493.9 billion, while risk-weighted assets increased to £231.4 billion, reflecting the impact of strong lending growth.
Net interest income remained stable, rising by 5% to £6.7 billion. However, operating costs increased by 4% to £4.9 billion due to inflationary pressures and business growth costs.
Further increases were offset by cost savings and ongoing cost discipline.
Returns for shareholders
Group chief executive Charlie Nunn remarked, “We have shown sustained strength in our financial performance in the first half of 2025, with income growth, cost discipline and robust asset quality, driving strong capital generation and increased shareholder distributions, with a 15% increase in the interim ordinary dividend,”.
“Our strategic progress and sustained strength in our financial performance allows us to re-affirm our 2025 guidance and gives us confidence in our 2026 commitments. It also underpins our delivery of higher, more sustainable returns for our shareholders.”
Although the results exceeded analyst forecasts, experts maintained their recommendations unchanged, pointing to the pending Supreme Court ruling on motor finance issues, with the group setting aside £1,150m for potential compensation expenses.
Zoe Gillespie, investment manager at RBC Brewin Dolphin, commented, “Lloyds has delivered another strong set of results, with profits and income beating expectations. Despite interest rates being on a downward trajectory, the bank has also managed to strengthen its net interest margin and secure more customer deposits in a competitive UK banking environment,”.
“That said, the big unknown remains the enquiry into mis-sold car financing products, and Lloyds is one of the most exposed financial institutions.”
Lloyds has reiterated its 2025 guidance and announced a 15 per cent year-on-year increase in its interim dividend, while expressing confidence in achieving its 2026 target of delivering more than £1.5bn.
